Software M&A's drop 7% in Q1

Mobile & tablets

by CBR Staff Writer| 04 April 2013

Deal value decreased 53% to $7.4bn

The total volume of mergers and acquisitions in the software industry decreased 7% in the first quarter of 2013 to 336 transactions, according to the latest report from Berkery Noyes.

According to the report, deal value decreased 53% to $7.4bn in Q1 versus the same period a year earlier.

Berkery Noyes said that there were three deals valued at over $1bn in Q1 of 2012 and there was only one software acquisition that topped $1bn so far this year.

The peak for transactions volume and value occurred in the second quarter of 2012 in the past 15 months, according to the report.

The report found that the top 10 biggest transactions accounted for 41% of the totals in Q1 this year, compared to 60% in Q1 2012 with Cisco making one of the industry's largest deals in the quarter, acquiring Intucell for $475m.

Cloud computing was also a big driver of M&A activity in Q1 with Amazon Web Services acquiring cloud management start-up Peritor, Vmware purchasing virtualisation business Virsto Software, and Oracle acquiring cloud infrastructure firm Nimbula.

Berkery Noyes chief information officer James Berkery said cloud computing and the ability to leverage big data in the cloud is driving M&A activity.

"There were several first quarter deals highlighting this trend, including Rackspace's acquisition of ObjectRocket and Actian's announced merger with Pervasive Software," Berkery said.

"Information technology providers are also looking for software solutions to help make sense of semi-structured and unstructured data. IBM's recent acquisitions of Star Analytics and StoredIQ, as well as Dell's acquisition of Kitenga in Q4 2012, are just a few relevant examples."

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