The Top 10 Tech Mergers And Acquisitions Of 2019 (So Far)
The unceasing push for better ideas, better people, and bigger markets is driving massive tech M&A deals this year.
Relentless Innovation Driving M&A
2019 has seen a number of blockbuster tech mergers and acquisitions, so CRN decided to highlight some of the bigger and more notable deals so far this year.
Salesforce’s nearly $16 billion deal to buy software maker Tableau Software was significant enough to land the San Francisco-based tech giant a place on the list. But smaller acquisitions such as Accenture’s deal with ad firm Droga5 were also worth a mention.
Other deals such as those between Apple and Intel as well as between T-Mobile and Sprint made our list.
Below is the full list of CRN’s biggest tech deals so far this year, which highlights not only those that involve big-dollar figures but others that caught the most attention.
Salesforce And Tableau
Salesforce.com took a major step to increase its business analytics portfolio in June when it struck a deal to acquire Tableau Software, one of the leading developers of business intelligence and data visualization software, for a whopping $15.7 billion.
Under the terms of the deal, Salesforce will acquire publicly held Tableau in an all-stock transaction. Salesforce will exchange 1.103 shares of its common stock, valued at $15.7 billion, for each share of Tableau's Class A and Class B common stock.
"We are bringing together the world's No. 1 CRM with the No. 1 analytics platform," said Salesforce chairman and co-CEO Marc Benioff in a statement announcing the deal. “Tableau helps people see and understand data, and Salesforce helps people engage and understand customers."
The combination, he said, combines "two critical platforms that every customer needs to understand their world." Both companies emphasized the role that CRM and business intelligence software plays in the $1.8 trillion digital transformation space and said the Salesforce-Tableau combination will position Salesforce as a major force in that market.
"Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data," Tableau president and CEO Adam Selipsky said in the statement. "As part of the world's No. 1 CRM company, Tableau's intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations."
Zix Buys AppRiver
Dallas-based Zix bought email security provider AppRiver in February making a massive push into the channel, increasing the number of its partners 10-fold with the stroke of a pen.
The deal is expected to create a secure email juggernaut in the SMB market with annual recurring revenue of $180 million and “game-changing application delivery for MSPs,” Zix CEO David Wagner told CRN.
“We’re the first ones to bring together a platform for cloud email delivery that extends beyond just Microsoft to a broader security and compliance suite,” Wagner said. “The ability to acquire AppRiver, to more than double the size of the company and to position ourselves really strongly with MSP partners who are driving, frankly, they’re the enablers of cloud technology to small to medium business, and this acquisition puts us in a really great spot to help them deliver value to their customers.”
The $275 million deal saw the number of Zix partners shoot from 400 to 4,000 as it absorbs AppRiver, a winner of numerous channel awards including CRN Security 100: Coolest Web and Application Security Vendor and Inc. 5000’s Fastest Growing Companies In America, among others.
Wagner said this acquisition provides big advantages for MSPs and solution providers who become partners.
In April, Juniper Networks completed the acquisition of artificial intelligence-powered networking startup Mist Systems for $405 million with the goal of leveraging Mist’s technology to boost enterprise sales with an AI-driven end-to-end approach.
“With Juniper and Mist together, we will blaze the path to AI for IT in this era of digital transformation,” said Manoj Leelanivas, chief product officer at Juniper Networks, in a blog post announcing the completion of the acquisition. “With Mist, Juniper is one of a limited number of companies that can serve enterprises end to end. While Mist started by bringing AI-driven operations to WLAN, Juniper and Mist together will leverage this AI-driven approach across the IT stack.”
Cupertino, Calif.-based Mist, which made CRN’s 2018 Emerging Vendors list, has built what it calls the world’s first AI-driven wireless platform that makes Wi-Fi more predictable, reliable and measurable. Mist, a startup founded by former Cisco Systems executives, developed an AI virtual assistant, Marvis, to simplify wireless troubleshooting and give insight into network and customer behavior.
Mist, which is now a Juniper company, will retain its commitment to an open framework so customers can leverage offerings from other vendors as well, said Leelanivas. The company said it will be sharing Mist’s AI-driven wireless offering to the wider audience of Juniper customers.
Insight Acquires PCM
In June, Insight acquired PCM in a $581 million blockbuster deal that reshaped the channel landscape and created a new $9 billion solution provider powerhouse. The deal combined Tempe, Arizona-based Insight, No. 14 on the CRN SP500, with El Segundo, Calif.-based PCM, No. 30 on the CRN SP500.
It gave Insight an additional 40 locations across three geographies and 4,000 employees including more than 2,700 client-facing employees in sales, technical and service delivery roles. The deal puts Insight at No. 11 on the CRN SP500, just behind SHI.
Insight CEO Ken Lamneck said the PCM acquisition helps further transform Insight from a value-added reseller to a well respected global solutions provider.
“Together with PCM, we will be even better positioned to capitalize on our solution area investments through the addition of more technical and sales resources and access to thousands of new clients, especially in the mid-market and corporate client segments,” said Lamneck.
Under the terms of the deal, Insight will acquire PCM for $35 per share- a 36 percent premium to its one month average closing share price as of Friday, June 21, 2019.
Google struck a deal in June to acquire business analytics software developer Looker for $2.6 billion in a blockbuster move to expand the business intelligence offerings of Google Cloud.
Looker, one of the more prominent startups in the business analytics space, develops a platform with business intelligence, data applications and embedded analytics capabilities. The company's platform runs purpose-built applications for marketing and web analytics and the company recently added a sales analytics application to its product portfolio.
While Google Cloud will deepen its integration of Looker into Google Cloud Platform, customers will continue to benefit from Looker’s multi-cloud functionality and its ability to bring together data from software-as-a-service applications including Salesforce, Marketo and Zendesk, as well as traditional data sources, according to Google Cloud CEO Thomas Kurian.
That will empower companies to create a cohesive layer built on any cloud database, including Amazon Redshift, Azure SQL, Snowflake, Oracle, Microsoft SQL Server or Teradata, as well as on other public clouds and in on-premise data centers, he said.
Accenture Buys Droga5
The merger of Accenture Interactive and Droga5 blends the creative capabilities of one of the country’s top ad agencies with the technical expertise of a top solution provider with the goal of re-imagining the customer experience across every industry, Glen Hartman, head of Accenture Interactive – North America told CRN.
“Accenture Interactive is about one thing: helping our client create and deliver the best experiences on the planet,” Hartman told CRN. “When we talk about experience, we don’t mean it like UX, a web site, or mobile app. We mean the full customer experience: marketing, advertising, branding, could be sales, could be customers service, anyway that brand engages with a customer. When we have that, we really are trying to inspire our clients to think bigger and we need Droga to help us drive big ideas within that context, for these experiences.”
Droga5 was founded by David Droga in 2006. The acclaimed creative agency -- with more than 500 employees in New York and London – won praise for its “industry-challenging work,” according to a statement. Clients include Amazon Prime Video, Tourism Australia, The New York Times, IHOP and a Game of Thrones’ Super Bowl ad. According to the statement, Droga5 was named agency of the year 20 times by Adweek, Advertising Age, Cannes Lions International Festival of Creativity, and the North American Effie’s, among others. Droga5 said it also partners with brands such as Chase, Prudential, Kraft, Hershey, Hennessy and Under Armour.
“This is the start of an exciting new chapter in Droga5’s history,” Droga said in a statement. “Accenture Interactive is one of the most disruptive forces in the industry, and we have always been a safe space for audacious ideas. I’m confident they are the best partner to grow our business and provide greater opportunities for our clients and our people. Why live off past glories when you can get busy trying to create new ones?”
Capgemini Buys Altran
Capgemini, the global consulting, IT services, and digital transformation powerhouse, said in June that it plans to acquire Altran, a leading provider of engineering and R&D services, in a massive deal worth 3.6 billion euros, or $4.1 billion at Monday's exchange rate.
The deal, which is slated to close by the end of the year, is aimed at making Capgemini a leader in providing digital transformation services, or "intelligent industry," to customers, said Paul Hermelin, chairman and CEO of Paris-based Capgemini, in a prepared statement.
"The complementarity and power of our combined business and technological expertise are truly outstanding assets. By joining forces, we are positioning ourselves as a clear strategic partner to assist our clients in taking full advantage of the revolution created by the developments of the cloud, Edge computing, IoT, artificial intelligence and 5G," Hermelin said in the statement.
Capgemini, which in fiscal 2018 generated revenue of 13.2 billion euros, or just over $15 billion, is ranked number 7 on the CRN 2019 Solution Provider 500 list. The company has over 200,000 employees, and is focused on cloud, digital, and platform solutions.
Altran, also based in Paris, in 2018 generated revenue of about 2.9 billion euros, or about $3.3 billion, with nearly 47,000 employees. The company provides engineering and R&D services to customers in a wide range of industries. Altran in late 2017 acquired Aricent, making it a leading provider of design and engineering services with expertise in expertise in semiconductors, digital experience, and design innovation.
DXC Technology Buys Luxoft
DXC Technology spent $2 billion in an all-cash transaction to acquire a Switzerland-based digital consultancy that does business on five continents, and has strong industry expertise in automotive, financial services, health care and science, the company announced today.
The deal for Luxoft -- a 19-year-old, 13,000-employee digital consultancy based in Zug, Switzerland that does business in 22 countries – comes down to talent. DXC CEO Mike Lawrie said Luxoft has some of the best minds in the business and the company plans to put them to use to “more rapidly transform the DXC workforce” and acquire skills DXC needs more rapidly.Lawrie told investors during a conference call announcing the deal, that Luxoft took in $911 million in revenue for the last four reporting quarters.
Herndon, Va.-based DXC planned to buy all of the issued and outstanding company stock for a purchase price of $59 per share, which Lawrie said is about 48 percent higher than where it trades. Lawrie said the two companies have been talking since last summer about a deal, but talks didn’t accelerate until the last two to three months.
“We thought we had to do something to accelerate our digital performance, number one,” Lawrie said. “Luxoft is positioned in an entirely different part of the market. This is really about an end-to-end value proposition. There’s very little overlap between what Luxoft does and what DXC does. The power of this is combining that end-to-end value proposition, so the front end capability, then the ability to integrate that into the existing IT infrastructures and fabric of our client base as well as Luxofts client base.”
Apple Acquiring Intel’s Smartphone Modem Business
Apple reached an agreement in July to acquire the "majority" of the smartphone modem business from Intel, in a $1 billion deal that has major implications for future iPhone development. The two companies announced the deal July 25, issuing identical news releases. The release said Apple will take on 2,200 Intel employees as well as intellectual property and equipment from the chip maker.
Talks between Apple and Intel had reportedly been taking place on and off over the past year. In April, Apple and Qualcomm dropped their long-running legal dispute by reaching a six-year patent license agreement, as well as a multiyear chipset supply agreement.
However, evidence has also been mounting that Apple wants to develop its own iPhone modems—and the acquisition from Intel would appear to accelerate those efforts, according to a solution provider partner of Apple, who asked to not be identified. Apple has a lengthy history of chip design, including on the CPUs used in iPhones and iPads.
Two of the country's largest wireless carriers recently received their long-awaited regulatory approval. Sprint and T-Mobile are coming together in a $26.5 billion mega-merger that will reshape the mobile landscape, dwindling the total number of US carriers.
U.S. Department of Justice officials gave the two firms the green light on July 19 after months of lengthy negotiations. As part of a settlement with justice, the combined company will divest Sprint’s prepaid businesses and Sprint’s 800 MHz spectrum assets to Dish Network. After the deal closes, the companies will provide Dish wireless customers with access to the new company’s network for seven years, and offer standard transition services arrangements to Dish for up to three years. Dish will also have an option to take on leases for certain cell sites and retail locations that are decommissioned by the combined company.
“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division in a statement.
T-Mobile’s stock was up 3.56 percent to $82.76 after the deal was announced. Sprint’s stock rose 6.32 percent to $7.91 per per share.