M&A activity in the IoT marketplace
A declining number of transactions, at lower prices means that many IoT businesses have missed the boat if they are hell bent on mergers. If people were waiting for deal prices to fall, then perhaps the time to move is now.
During 2018 some $89 billion was spent on mergers in the IoT sector,
down some $23 billion from the record breaking 2016 when deals worth $112.5 billion were completed. This is mostly because all the massive monster deals for semiconductor players, have already happened.
This is shown in our new Riot Report: “IoT M&A Activity enters death spiral
The land-grab is over” out this week from Rethink Technology Research’s Riot (Rethink IoT). The entire service, including this report is available now starting at $1,850. This report includes a full spreadsheet with all 501 deal we have tracked since 2015, which relate to some aspect of IoT.
This past year was only just saved from disaster by the Q4 performance with $46.7 billion of 2018 deals coming in Q4. Deals made in Q2 and Q3 totaled just $13.6 billion and are the weakest quarters of mergers in the sector since we began following it in 2015.
But many smaller companies were acquired with Q2 accounting for 44 deals, double the number of deals carried out in 2015, but each with lower valuations.
The IoT industry is losing enthusiasm for IoT acquisition because IoT revenues have not grown as fast as was originally assumed. Venture capital and private equity enthusiasm for the IoT is clearly waning and while global M&A has hit historic highs, from June 2017 to June 2018, IoT has not kept up. Semiconductor M&A declined from 2015’s record-high $107.3bn.
Semiconductors continue to comprise most of the larger deals and in 2018, Microchip bought Microsemi for $8.35 billion and Renesas paid $6.7 billion for IDT to boosts its automotive chip offerings.
This report will help you:
Place a value on any type of IoT company
See the prices that companies are changing hands for in your market
Get the timing right for a consolidation move
Drive merger insights into your management team
Provide evidence for a transaction so you do not overpay
Mergers may be the right way for you to cover the IoT, but similarly it may be the wrong direction entirely and looking at the landscape in its entirety is the only way to be sure and make a case to your board.
Companies mentioned in this report include: ARM, AWS, BlackBerry, CB Insight, Clarion, Cloudera, Cylance, E.ON, Faurecia, Grab, Google, Hitachi, Hortonworks, IBM, IDT, Innogy, Microchip, Microsemi, Microsoft, Motorola Solutions, MuleSoft, Peugeot, PillPack, PwC, Red Hat, Renesas, Reuters, Ring, RWE, Salesforce, SoftBank and Uber.