When we check In Enterprise M & A in any year, it is tempted to uncover the biggest, flamboyant deals – and in 2020 there were many. I have written about 34 acquisitions so far this year. Of those, 15 were worth $ 1 billion or more, 12 did not require that the companies disclose the price and the remainder fell somewhere in between.
The four deals involving chip companies totaled more than $ 100 billion. While no one sees MA as a chip industry, other sectors have also offered to raise their own eyebrows, led by Salesforce is buying Slack $ 27.7 billion earlier this month.
We are likely to see more industries that the way chips have done in 2020 is probably not as dramatic or expensive.
Yet despite the drama of these large numbers, the most interesting targets for me were the epidemic-driven small deals that began in May. Those small acquisitions are so trivial that the company is not required to publicly share the purchase price. They typically absorb early-stage companies with cash-rich concerns looking for some combination of missing technology or engineering talent in a particular area, such as security or artificial intelligence.
It was definitely an active year in M&A, and we still haven’t seen its final. Let’s take a look at why those minor deals were so interesting and how they compare to the big ones, while the 2021 looks like an M&A ahead.
Early stage blues
It’s always hard to know why an early-stage startup would give up its independence by selling a large unit, but we can certainly speculate on some of the reasons why this year’s rapid-fire process began in May . While we can never know for sure why these companies decided to exit through acquisitions, we do know that in April, the epidemic hit the United States in full force and the economy began to take off.
Some startups were particularly weak at the April deadline, particularly the companies’ low on cash. Obviously companies fail when they run out of funding, and we started looking at early-stage startups the following month.
We certainly do not know that there is a direct connection between the economic crisis of April and the murmur of deals that began in May, but we can reasonably guess that there was. For a few percent of them, I’m guessing it was a fire sale or at least a deal made in less than ideal terms. For others, they probably did not have the bus to keep going under such unfavorable economic conditions or the participation was too good to pass up.
It is worth noting that I did not cover any deals in April. But, starting on 7 May. Zoom bought keybase For its encryption expertise; Five days later Atlassian bought help For sluggish integration; And then bought VMware Cloud native security startup octarin – And we were running. The large companies benefited from these acquisitions, but stood out over time.