By Peter Sayer, Senior Editor, CIO | 9 APRIL 2021
Collected at: https://www.cio.com/article/3531975/the-biggest-enterprise-technology-ma-deals.html?utm_source=Adestra&utm_medium=email&utm_content=Title%3A%20The%20biggest%20enterprise%20technology%20M%26A%20deals%20of%202021&utm_campaign=CIO%20Daily%20News&utm_term=CIO%20UK%20Daily&utm_date=20210607125136&huid=5e0c1b34-7735-4637-b4ec-d75bc72cdc0e
The first three months of 2021 saw three billion-dollar-plus acquisitions in hardware, software, and services, and plenty of other merger activity in professional services.
Already in 2021, we’ve seen enterprise tech acquisitions in hardware, software, and services that have topped $1 billion — although so far there’s nothing to rival the two blockbuster deals announced in 2020, Salesforce.com’s $27.7 billion offer for Slack and AMD’s $35 billion bid for Xilinx, both of which have yet to close.
The pace of acquisitions will increase in 2021, according to two-thirds of company executives, bankers, and other dealmakers surveyed by Morrison & Foerster last December. That’s the most optimistic forecast in almost seven years, according to the law firm.[ Learn the 10 old-school IT principles that still rule and the 12 ‘best practices’ IT should avoid at all costs. | Get the latest insights by signing up for our CIO daily newsletter. ]
The enterprise software and services landscape is ripe for such consolidation. It has continued evolving, even as the pandemic has rumbled on, with cloud services in particular changing rapidly. The big outsourcers are adapting their offering to match, often through the acquisition of smaller rivals or niche professional services firms.
For CIOs, mergers and acquisitions (M&As) in the tech space can be disruptive to strategic rollouts, spell a need to pivot to a new solution, mean the potential sunsetting of essential technology, provide new opportunities to leverage newly synergized systems, and be a bellwether of further upcoming shifts in the technology landscape. Keeping on top of activity in this area can help your company make the most of emerging opportunities and steer clear of issues that often arise when vendors combine.
Here CIO.com rounds up of some of the most significant M&As of recent months that could impact IT.
Australia’s Ampion snapped up by Wipro
On April 1, 2021, Wipro agreed to buy Ampion, an Australian company formed in September 2020 from the merger of IT service provider Revolution IT and cybersecurity firm Shelde, for a reported $117 million. With the deal, the giant Indian IT consulting and business processes company is looking to bulk up its operations in Australia to take advantage of the growing adoption of cloud solutions there.
Wipro offers $1.45 billion for financial consulting firm Capco
Wipro has its eye on far larger opportunities on the other side of the world: In March it agreed to pay $1.45 billion for Capco, a management and technology consultancy serving financial institutions in Europe, Asia, and the Americas. Wipro hopes the move will give it access to higher-margin financial services business as profitability diminishes in the increasingly commoditized business process outsourcing services market.
Intellibot to help ServiceNow with process automation
With its acquisition of Indian robotic process automation (RPA) vendor Intellibot, announced in March 2021, ServiceNow will expand both its workflow management platform and its Indian workforce. India is already the site of ServiceNow’s second-largest R&D center, and the deal will enable it to double its headcount in the country over the next three years.
Content services providers merge: Hyland buys Nuxeo
Hyland Software, a U.S.-based content services provider, agreed in March to buy enterprise content management platform vendor Nuxeo, just a month after the French company opened a New York headquarters. Investment firms Goldman Sachs Growth Equity and Kennet Partners, which have owned Nuxeo since 2016, expect to make a 5x return on their investment.
Citrix closes $2.25 billion acquisition of collaboration platform Wrike
Citrix is already well-placed to profit from the move to hybrid working. Its Workspace desktop and application virtualization tool enables employees to access enterprise and SaaS applications from anywhere, through a unified interface. Wrike, the online project and work management service it has just acquired for $2.25 billion, enables teams to communicate — but in a more structured environment than Slack or Teams, as it is focused on tracking the progress of projects and the tasks they comprise. Wrike also offers low-code workflow automation capabilities with which Citrix can bolster the existing automation functions in Workspace.
Precisely is under new ownership
Precisely has a new owner, which is also its old owner. The data integrity specialist, formed in December 2019 from the merger of Syncsort and Pitney Bowes Software & Data, offers tools to integrate data from mainframes and legacy databases with cloud platforms including Databricks, Microsoft Azure Synapse, and Snowflake. Investment firm Clearlake Capital owned Syncsort until 2017, and now it and TA Associates have bought a majority stake in Precisely.
Qualcomm buys server chip designer to make laptops
After rapidly equipping millions of office staff to work at home, it’ll be a while before many enterprises buy another Windows laptop — but their next wave of refreshes might have Qualcomm processors inside. In March, Qualcomm paid $1.4 billion to buy Nuvia, a company that had been designing processors for servers. Qualcomm’s put a stop to that, though, and put Nuvia to work conceiving chips for high-end laptops. They could be coming out of the factories and on their way to laptop designers by late 2022.
Diligent to buy Galvanize and Steele Compliance Solutions
Diligent is expanding the capabilities of its enterprise governance platform. It is acquiring ethics and compliance specialist Steele Compliance Solutions, and governance, risk, and compliance SaaS vendor Galvanize in separate deals that it expected to close in March 2021.
Managed data services provider Calligo’s acquisition spree takes it to the US
Calligo, an outsourcer of managed IT and data privacy services, has been on an acquisition spree of late: Last year it bought Network Integrity Services in the UK, and Cinnte Technologies, Itomic Voice & Data, and DC Networks in Ireland. Now it’s reinforcing its position in the US, buying data analytics specialist Decisive Data.
Skynamo’s field sales app picks up digital catalogue maker mSeller
Skynamo, a South African software developer active in the US and UK, has beefed up the mobile app linked to its field sales management platform with the digital catalog developed by its recent acquisition, UK software house mSeller. It offers apps tailored for several industries, and integrates with ERP systems, including SAP and Acumatica.
Apptio buys Targetprocess
Following its October acquisition of SaasLicense to help optimize spending on cloud applications, Apptio is buying Targetprocess, this time to help CIOs figure out what internal software development projects they should invest in next.
With SignRequest, Box takes step towards business process management
Box already stores signed contracts and other documents for many enterprises; now it’s hoping to manage the signing process too, with the acquisition of SignRequest for $55 million. The company expects to use SignRequest’s capabilities to offer a new service, Box Sign, in the third quarter.
Red Hat buys StackRox to secure Kubernetes
With its OpenShift platform, Red Hat is increasingly helping its customers run workloads in containers using Kubernetes. Securing those workloads, and the many layers of code they are wrapped in, is a challenge — one that Red Hat hopes to meet with its acquisition of StackRox, which closed in late February. StackRox has a software platform that can secure Kubernetes workloads running not just on OpenShift but also on Amazon Web Services, Microsoft Azure, and Google Cloud Platform. Red Hat plans to open-source the StackRox code, and to use it to secure container build and continuous integration/continuous deployment processes.
Oracle’s bid for stake in teen video app TikTok on hold
As of Feb. 11, a bid by Oracle and Walmart for 20% of TikTok Global, a sort of mobile YouTube used by millions of teenagers, was still on hold. The Trump administration didn’t want TikTok’s Chinese parent ByteDance controlling an app on millions of U.S. smartphones, prompting ByteDance to create a US subsidiary and search for a buyer. President Biden, though, is in no rush to approve the deal while his administration reviews its policy on China. It’s hard to see what Walmart wants with the stake but Oracle has already won something from the controversy: TikTok will pay to host its US operations in Oracle’s data centers. Like the similar hosting deal with lockdown conferencing sensation Zoom Video Communications, this adds weight to Oracle’s pitch to be seen as a serious provider of cloud infrastructure.
IBM buys Salesforce specialist 7Summits
IBM is adding some Salesforce integration expertise to its professional services division, IBM Global Business Services, with the acquisition of 7Summits, a small consulting company based in Milwaukee. It’s a small step, but a sign that IBM is keeping a close eye on where growth in demand for its services will come from in future.
Cognizant to buy Servian, Linium, and Magenic Technologies
Cognizant went on a tear in January, agreeing to buy three companies. First came Servian, a cloud data and analytics consulting firm in Australia, through which Cognizant plans to expand its capabilities in the region. Next was Linium, a small cloud transformation consultancy focused on ServiceNow. Its 150 staff are based in New York state, Canada, India, and the UK. Third on Cognizant’s list was Magenic Technologies, a custom cloud software developer with 475 staff in the US and another 350 in the Philippines that Cognizant hopes will beef up its cloud modernization capabilities. It will fold Magenic into Softvision, another software developer it acquired in 2018.
Deloitte Consulting buys HashedIn Technologies
Deloitte Consulting, too, is expanding its cloud software engineering capabilities, in January closing a deal to purchase HashedIn Technologies, an Indian software developer specializing in SaaS projects. HashedIn will add 750 staff worldwide to Deloitte’s 50,000-strong workforce.
Navisite buys SAP specialist Velocity Technology Solutions
Managed cloud service provider Navisite has acquired another SAP partner, strengthening its support for ERP in the public cloud. The latest acquisition, Velocity Technology Solutions, offers managed services to help companies move to SAP’s S/4HANA, and joins SAP consulting firm Dickinson + Associates under the Navisite umbrella.
AMD to pay $35 billion for FPGA play Xilinx
With the rise in machine-learning, AMD has seen increased demand for GPUs, a market in which Nvidia, not Intel, is its biggest rival. Some ML workloads, though, run more efficiently or economically on field-programmable gate arrays (FPGAs), chips that are general-purpose when they leave the factory, but optimized for a specific task once programmed. Intel made its FPGA play in 2015, paying $16.7 billion for Altera. AMD’s October offer to buy Altera’s main competitor, Xilinx, for $35 billion in stock cleared its first antitrust hurdle in January, potentially opening up new markets for it in machine learning and inference.
Information Builders to be Tibco Software’s biggest buy yet
Tibco Software has closed its acquisition of Information Builders, which it will roll into its range of data integration products. Information Builders makes data and analytics software. Tibco says the deal, reported to be worth almost $1 billion, is its largest acquisition ever.
Salesforce.com to buy Slack for $27.7 billion
Integration with enterprise chat tool Slack is increasingly seen as a key feature for SaaS apps in conferencing, ticketing, calendaring, or project management. Now Salesforce.com has taken that integration one step further, agreeing to pay $27.7 billion to buy Slack so that it can make it the new interface for its Customer 360 platform. Salesforce’s support will open the door of more enterprises for Slack and give it the resources it needs to go head-to-head with Microsoft’s Teams product. Salesforce, though, will likely need to add a few more components to its platform if it’s to be seen as a full-featured alternative to Microsoft 365 or Google Workspace. Meanwhile, the Department of Justice sent Salesforce and Slack a “second request” for more information on the deal in mid-February 2021.
Twilio buys customer data platform Segment for $3.2 billion
Twilio has already worked its way into many enterprises with its range of APIs for voice, text, chat, video and email communication with customers. With its November acquisition of customer data platform Segment for $3.2 billion in stock it aims to extend that reach, controlling not just how customers receive specific messages but also why.
Ericsson pays $1 billion for enterprise 5G vendor Cradlepoint
It’s always been possible for enterprises with large campuses or industrial sites to build out private cellular networks, but the arrival of 5G mobile technology makes it both easier and more interesting. Telecommunications equipment vendor Ericsson primarily sells to telcos, but CIOs should expect a call too, as in November it closed its $1 billion acquisition of Cradlepoint, an Idaho company that sells wireless edge systems to enterprises.
SAP shows it’s still in customer experience game with Emarsys buy
SAP’s acquisition of Austrian omnichannel customer engagement platform vendor Emarsys shows that it’s still very much interested in customer experience. Previously, the company had been sending mixed signals about its commitment to the category, announcing plans in July that it would sell off a stake in Qualtrics, the survey company it paid $8 billion for in 2018. SAP isn’t saying how much it paid for Emarsys, but some reports put the price at around $500 million. Emarsys had previously raised around $55 million in venture funding.
Sinch buys SAP Digital Interconnect
Here’s another acquisition involving SAP — and for once it’s not SAP doing the buying. Sinch is a Swedish provider of cloud-based outbound calling and messaging services for customer engagement. SAP Digital Interconnect (SDI) offers something similar, but with APIs that hook deep into SAP’s ERP and CRM platforms. In November Sinch closed a €225 million ($250 million) acquisition of SDI to expand its engineering team and gain exposure to the enterprise market.
GTT Communications sells infrastructure division to I-Squared Capital
After GTT Communications acquired Interoute, Hibernia and KPN International, it found itself with some excess capacity, including a fiber network spanning 103,000 kilometers and 400 points of presence, three transatlantic cables and 14 data centers. Investment firm I-Squared Capital has snapped those up for $2.15 billion, leaving GTT to focus on cloud networking and what it calls a “capex-light” business model.
Apptio buys SaasLicense
Apptio, a company that helps CIOs figure out how much they’re spending on IT, has bought SaasLicense, a tool to help businesses optimize their spending on software as a service. Apptio won’t say how much it spent.
Progress Software takes charge of Chef Software
App dev platform vendor Progress closed a $220 million deal in mid-October to buy devops/devsecops specialist Chef Software, the company behind Chef Enterprise Automation Stack, Infra, InSpec and other tools to speed software development.
Veeam buys Kubernetes backup specialist Kasten
Veeam has added Kubernetes backup to its range of cloud data management services. In October it paid $150 million for Kasten, whose K10 platform allows enterprises to back up and restore Kubernetes applications wherever they are running.
KKR sells Epicor Software to CD&R for $4.7 billion
KKR, the investment firm that acquired Epicor Software for a rumored $3.3 billion in 2016, has flipped it to another investment firm for $4.7 billion, after a year searching for a buyer. Epicor, a cloud ERP vendor targeting industry verticals in manufacturing, services and distribution, is the first big move into tech for Clayton, Dubilier & Rice. CD&R says it wants to expand Epicor’s product portfolio and grow the firm through further acquisitions. (Under KKR’s ownership it bought docSTAR, MechanicNet and 1 EDI Source.) KKR hasn’t abandoned software altogether: It still owns BMC Software, acquired in a 2018 deal said to be worth $8.5 billion.
SugarCRM buys Node
Sales staff increasingly expect their CRM tools to tell them which of their customers to contact next and why, rather than helping them remember what they bought last time or the name of their dog. That’s prompted SugarCRM to snap up Node, a Silicon Valley startup that offers a range of AI-based predictive analytics tools for automating sales and marketing functions. It’s SugarCRM’s fourth acquisition in two years: The others were Collabspot (email integration), Salesfusion (marketing automation) and Corvana (sales analytics).
Analog Devices to buy Maxim Integrated Products for $21 billion
Analog Devices wants to combine its experience in high-frequency radio semiconductors with the strengths of Maxim Integrated Products in making components for data centers. These markets are colliding as computing associated with the internet of things moves to the edge of 5G network infrastructure. Although the two chipmakers announced in mid-July that they plan to merge, the $21 billion deal won’t close until the middle of 2021.
NetApp buys Spot to optimize costs
NetApp, big in hybrid cloud infrastructure, has mopped up Spot, a much smaller business specializing in cloud cost optimization. The deal, rumored to be worth $450 million, closed mid-July. Spot — now Spot by NetApp — offers compute and storage cost optimization tools that the company says can help spendthrift enterprises save up to 90% on cloud costs.
Databricks acquires dashboarding tool Redash
Databricks has enhanced its data analytics platform with the acquisition of Redash, the company behind an open source dashboarding tool for data scientists. Databricks has some solid technical chops: It was founded by creators of the big data analytics engine Apache Spark and of Delta Lake, an open source storage layer for data lakes, and offers enterprise services built on top of them. While Databricks’ data analytics platform can already be connected to Redash, the acquisition will allow Databricks to more fully integrate the two.
BMC Software buys Compuware
For all the talk of disruptive technologies, mainframes remain at the heart of many businesses today, and it is this fact — and the enterprise’s need for modernization — that fueled the merger of two specialists in software modernization. The combination of BMC’s Automated Mainframe Intelligence (AMI) and Compuware’s product range, which closed on June 1, will help enterprises manage mainframes as part of their DevOps strategies. Compuware last changed hands for around $2.4 billion in 2014 in a buyout by private equity firm Thoma Bravo, which took the company private and split it into two entities, Compuware’s mainframe software business and Dynatrace, which was spun out to focus on software management. BMC isn’t saying how much it paid for Compuware this time around.
Cincinnati Bell sells to Macquarie Infrastructure
Early next year, enterprises in Cincinnati, Ohio, and Hawaii will find their local telco is under new ownership. In December 2019, it seemed a done deal that Brookfield Infrastructure Partners would acquire Cincinnati Bell for $2.6 billion. In early March 2020, though, Cincinnati received a higher offer from Macquarie Infrastructure and, after a short bidding war, broke off the engagement to strike a deal with Macquarie worth $2.9 billion, which shareholders finally accepted in May. Customers counting on Cincinnati’s ambitious fiber upgrade and 5G rollout plans may have dodged a bullet: Brookfield, the rejected suitor, focuses on generating stable cash flows from minimum maintenance capital expenditures.
Palo Alto Networks secures connection with CloudGenix
April saw the acquisition by Palo Alto Networks of software-defined-WAN specialist CloudGenix for $420 million, allowing the cybersecurity firm to add SD-WAN functions to its Prisma Access secure edge platform.
Microsoft affirms interest in 5G networks
Affirmed Networks makes software for building virtualized, cloud-based telecommunications networks, and counts some of the world’s biggest telcos among its customers. Now it’s part of Microsoft, which sees in the acquisition a way to expand its relationships with mobile network operators and play a role in the deployment of 5G services.
Quantum buys WD’s object storage unit ActiveScale
Quantum, a data storage vendor, has bitten off a chunk of Western Digital, the hard disk giant that bought flash storage vendor SanDisk back in 2015. When WD decided it could do without ActiveScale, a business unit that makes object storage systems, Quantum saw an opportunity to beef up its high-speed unstructured data storage capabilities.
Equinix buys Packet Host
Data center owner Equinix has added a new string to its bow with the March acquisition of Packet Host, a specialist in bare metal automation for a reported $330 million. Equinix says the deal will help its customers deploy multicloud infrastructure without the overhead associated with virtualization or multitenancy.
Clarivate Analytics buys Decision Resources
Data vendor Clarivate closed its $950 million purchase of Decision Resources in March 2020. Clarivate gathers information about trademarks, patents, scientific research and industrial standards, selling the databases to enterprises under a variety of brands. CIOs that want to hang on to valuable domain names might already know Clarivate’s MarkMonitor brand. With the acquisition of Decision Resources, Clarivate now has a greater range of data about the medical and health care industries at its disposal.
Salesforce buys Vlocity for $1.3 billion
Vlocity is one of Salesforce’s biggest cheerleaders: It builds industry-specific CRM solutions on top of Salesforce for communications, government, health, insurance, media and utility companies. Salesforce’s February 2020 acquisition of Vlocity will reinforce its vertical-market offering. It took a big step in this direction in September 2019, adding consumer goods and manufacturing clouds to the banking, financial services and life sciences CRM tools it already offered.
Kronos merges with Ultimate Software
Human capital management (HCM) software vendors Kronos and Ultimate announced their merger in February 2020, although it’s a wonder it didn’t happen a year earlier. That’s when private equity firm Hellman & Friedman, already the majority owner of Kronos, took control of Ultimate too. Kronos’ CEO Aron Ain is staying on to head the combined company, while Ultimate CEO Adam Rogers is leaving. For now, both companies’ product lines will be maintained.
Koch Industries takes full control of Infor
ERP vendor Infor was already 70%–owned by Koch Industries, a privately held industrial conglomerate with interests in minerals, manufacturing, chemicals and commodities. In February 2020 it agreed to buy the remaining stake in Infor from founding investor Golden Gate Capital. Koch Industries plans to make Infor a standalone subsidiary operating under its current management. Infor’s development of industry-specific cloud suites could receive a boost from its closer ties with the industry giant. Infor had previously been ramping up for what had been expected to be a significant IPO.
Moody’s buys Regulatory DataCorp for $700 million
Regulatory DataCorp offers a range of risk intelligence and compliance screening services for enterprises, including anti-money-laundering, know-your-customer and due-diligence solutions. In February 2020 credit rating agency Moody’s acquired it for $700 million.
Visa acquires Plaid Technologies for $5.3 billion
Plaid Technologies started up as an API platform that enabled app developers such as Betterment and Venmo to build mobile apps with which consumers can access their accounts at traditional financial institutions. Later, it added a layer of analytics to the data it provided. In January 2020 it became a subsidiary of Visa, where it will operate as an independent business unit.
Insight Partners buys Veeam for around $5 billion
Backup software vendor Veeam is now under U.S. control. Investment fund Insight Partners has acquired the company, founded by Russians Andrei Baronov and Ratmir Timashev and headquartered in Switzerland. Insight will move its headquarters to the U.S. and install chairman Bill Largent as CEO, replacing Baronov. The new owner plans to invest more in Veeam’s hybrid cloud strategy and international expansion, while the company’s Americanization could open up the U.S. government market too.
ServiceNow buys Passage AI
ServiceNow has been building AI assistance into its Now Platform for workflow management for a while, but when it comes to natural language processing that language has all too often been English. With its January 2020 acquisition of Passage AI, ServiceNow will add multilingual conversational capabilities to its chatbots, potentially opening up new markets for its users.
AMN Healthcare buys Stratus Video for $475 million
In the light of the subsequent spread of coronavirus, AMN Healthcare’s January 2020 acquisition of a service provider offering video-based language interpretation for the healthcare industry looks prescient. Stratus Video offers federally mandated language interpretation services over remote video link to help medical professionals communicate with patients with limited English.
F5 Networks buys Shape Security for around $1 billion
F5 Networks’ $1 billion acquisition of Shape Security, completed in January 2020, will beef up the protection of its application delivery network business. Shape offers fraud protection for web and mobile applications by analyzing the flow of data into them, and F5 already plays a role in handling that data in many enterprises.
Hitachi buys Hitachi High-Technologies for $4.9 billion
We’ll mention this one here because there was so much money involved, but chances are you barely noticed the change after this deal closed in January 2020. Japanese conglomerate Hitachi is taking its holding in industrial equipment maker Hitachi High-Tech from 51.73% to 100% and dropping three syllables from its name. The subsidiary makes semiconductor manufacturing equipment — the machines that make the chips for servers — but Hitachi’s main focus here is improving the profitability of the subsidiary’s other business line, medical equipment, through the use of the parent company’s experience in AI and data analytics.