February 12, 2016

Will industrial mash-ups replace megadeals in 2016?

Industrial mash-ups may replace megadeals in the coming year.

Last year was full of record-breaking technology industry mergers and acquisitions. With over 20 companies making $1 billion deals and another three megadeals that exceeded $10 billion, Nathan Eddy at eWEEK wrote, 2015 was certainly a year to remember. Despite this momentum, industry experts do not expect it to continue into next year, at least not in the same capacity.

One way the technology M&A industry will change, Jeffrey Liu explained at The Street, is that there will be more industrial mash-ups and partnerships. Like the potential Verizon-Yahoo deal or previous Verizon-AOL acquisition, these partnerships are a way for industry leaders to collaborate, meeting the market's needs in an entirely new way.

This is an innovative way for smaller companies to team up, becoming a competitive force to be reckoned with by industry giants.

"Megadeals are a lot rarer than our experience in 2015 would suggest. Remember, even though there were eight in 2015, there were only six in the previous decade," Liu told Eddy. "I believe we'll continue to see very high aggregate deal values for tech M&A in 2016, but they will likely fall back to Earth, or about half to two-thirds of the 2015 annual total. We envision new forms of close partnering … beginning to stand in for certain types of megadeals beginning this year."

For companies looking to pursue a major merger or acquisition, consult an M&A advisor today. With expert assistance, your company can make a deal that exceeds its projected growth goals. Contact us today to see how your company can benefit from a partnership with our skilled team of professionals.