According to the article in BusinessWeek, 2008 will be a good year for Tech M&A. I think so too... Already we are seeing a lot of activity with major tech companies furiously trying to might off their competition by investing and acquiring. Being in a tech startup, this article was a pleasure to read... Some snippets from the article...
According to Lorraine McDonough, eBay's mergers chief, "2008 is shaping up to be a good year to go shopping. Banks are reining in credit, relegating competing private equity firms to the sidelines, and stocks are tumbling, taking a bite out of asset prices. "We are in a good position to make acquisitions,". Early this year eBay purchased a payment-security firm Fraud Sciences for $169 million and expects to make eight or nine acquisitions this year.
Tech buying fever is catching. At the end of January, Microsoft made an unwelcome $44.6 billion bid for the troubled Web media portal Yahoo!, the largest tech takeover attempt of the decade. That same month, business-software maker Oracle said it would spend $8.5 billion on rival BEA Systems, and in mid-March Time Warner's AOL unveiled the biggest-ever acquisition of a social network, agreeing to spend $850 million on Bebo.
High-tech mergers and acquisitions have surged 132% this year through Mar. 25 from the same period a year earlier, according to Thomson Financial (TOC). Tech companies "are absolutely bargain-hunting," says Benjamin Howe, CEO of investment bank America's Growth Capital.
"With venture firms and management teams less optimistic on their prospects and more realistic on valuation, there will continue to be very heavy activity for major acquirers," Howe says.
Microsoft, along with computer maker Hewlett-Packard (HPQ) and networking gear giant Cisco Systems (CSCO) together have more than $125 billion in cash. "We will continue to look at new opportunities," says Mike Galgon, chief advertising strategist for Microsoft's advertiser and publisher solutions group. This year, Microsoft has made four purchases unrelated to Yahoo, including Danger, a maker of mobile-phone software, for an undisclosed amount. Microsoft is likely to make other purchases to beef up its Web search and online advertising businesses.
Oracle is expected to keep up its big-player role in the continuing wave of software consolidation, as clients increasingly look for a single provider that can provide a range of applications that work well together. HP has joined the software buying binge, recently announcing plans to acquire Exstream Software for an undisclosed amount. Last year HP paid $1.6 billion for data software maker Opsware.
Tech firms aren't alone. Deals are up in finance and the steel industry, too, although more modestly. JPMorgan Chase's (JPM) Federal Reserve-subsidized offer for Bear Stearns (BSC) reflects the consolidation of an industry beleaguered by subprime lending gone awry.
Read the entire article here... (Source: BusinessWeek)
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