Some 3,700 technology firms worldwide were acquired for nearly $219 billion during 2011, as spending to acquire tech companies increased 17 percent from the previous year, and a new study said that pace is likely to pick up in 2012.
The study, from 451 Research, said several multi-billion dollar deals like those from Hewlett Packard Google and Microsoft may have made the most news but pointed out that there were 3,687 more deals in 2011 for information technology, telecommunications and Internet companies--a 13 percent bump from 2010-- increasing M&A spending for the second year in a row, the most M&A activity since 2006.
"The fact that deal-makers managed to generate an increase in spending last year is remarkable given the turmoil that has shaken the financial markets since summer," said Brenon Daly, research director for M&A at 451 Research. Daly noted that just two of the 10 largest deals of 2011 came in the final four months of the year, when concerns about Europe's debt crisis reached their highest point.
The report found that U.S. buyers increased cash outlays for international targets substantially; spending on non-North American targets increased 48 percent year-over-year while the number of deals increased 28 percent.
Private equity firms, meanwhile, sat on the sidelines and did little to contribute to the spending increase. Their total outlays increased only seven percent from the prior-year level, accounting for 14 percent of the past year's tech spending. 451 said that for the first time since 2008, there wasn't a single private equity transaction among the 10 largest deals of 2011.
Among the significant transactions of 2011:
- Google paid $12.5 billion for Motorola Mobility.
- SAP spent $3.65 billion to acquire human capital management software vendor SuccessFactors.
- Hewlett-Packard paid a startlingly high premium, $11.7 billion, for British information management vendor Autonomy.
- Texas Instruments paid $6.5 billion for National Instruments, the largest semiconductor deal yet by a strategic buyer.
- Microsoft paid $8.5 billion for Skype.
- And a tech consortium purchased Nortel patents for $4.5 billion.
