The 10 Biggest Tech M&A Deals Of 2022 (So Far)
Despite the economic uncertainties of 2022, the pace of mergers and acquisitions in the IT industry doesn’t seem to have slowed. Here’s a look at the biggest tech mergers and acquisitions that have been announced, completed or are still in the works in 2022 (so far).
Let’s Make A Deal
The economic uncertainty of 2022 doesn’t appear to have slowed merger and acquisition activity within the IT industry. Through the first eight months of the year IT vendors, solution providers and private equity firms have continued to negotiate acquisition and merger deals with price tags in the hundreds of millions, billions, and even tens of billions of dollars.
Acquisition activity may have even ticked up in the first half of 2022 with the stock markets’ overall decline and plunging stock prices—and reduced company valuations—generating some bargains.
Blockbuster acquisitions have the potential to remake segments of the IT industry. The combination of two or more companies can create a newly dominant powerhouse in, say, semiconductors, IT management tools for MSPs, or products for hybrid work situations.
Acquiring companies can gain an infusion of technology that creates a competitive edge or provides an entry into a new vertical market. An acquisition can also give an IT vendor additional manufacturing capacity or help a solution provider establish a foothold in new geographies.
Even mergers and acquisitions that don’t happen can be big news in the IT industry. Cisco Systems, for example, reportedly made a $20 billion bid in early 2022 to buy machine data platform provider Splunk. One of this year’s biggest news stories in the semiconductor industry was Nvidia’s decision to drop its $40 billion deal to acquire Arm in the face of regulatory opposition.
Here’s a look at the IT industry’s biggest acquisition, merger and spinoff deals in 2022 (so far). Some deals were announced last year (or, in one case, even earlier) and completed this year. Others have been announced but are still working their way through regulatory and/or shareholder approvals before they can be wrapped up—some possibly not until 2023.
While dollar value is a factor in this ranking, some mergers and acquisitions have a greater impact on the IT industry in general, and the channel in particular, and that figures into the list.
No. 10: Oracle Makes Big Bet On IT Health Care With $28 Billion Cerner Acquisition
On June 7 Oracle completed its $28.3 billion acquisition of Cerner, a developer of health-care digital information systems, in a move that greatly expands Oracle’s footprint in the health-care IT market.
Oracle, based in Austin, Texas, announced the deal to buy Kansas City, Mo.-based Cerner in December 2021 and spent the first half of 2022 gaining the necessary shareholder and regulatory approvals. Cerner is now an industry business unit within Oracle.
Oracle already has a presence in the health-care market with its broad product portfolio. The company plans to modernize Cerner’s electronic medical records software with the Oracle Autonomous Database, Apex low-code development tools and the hands-free Voice Digital Assistant. More broadly Oracle will link the Cerner software to Oracle’s applications including its ERP and human resources management offerings.
Solution providers told CRN that health care is already a strong vertical for their Oracle practices and the addition of Cerner’s technology would boost Oracle’s position in health-care data analytics and AI.
No. 9: AMD Buys Edge Computing Startup Pensando for $1.9 Billion
Pensando had attracted a lot of attention since its 2017 launch, not least because the edge computing startup was founded by a group of former Cisco Systems engineers and its backers included former Cisco CEO John Chambers. The company had raised an impressive $313 million in venture funding.
So it was big news on April 4 when chip giant AMD announced a deal to acquire Pensando for $1.9 billion. (The acquisition closed May 26.)
AMD said that Pensando’s distributed services platform would expand AMD’s data center product portfolio with a high-performance data processing unit and software stack. Pensando’s founders and employees joined the AMD Data Center Solutions Group.
No. 8: Microsoft Buys Voice Recognition And AI Specialist Nuance For $19.7 Billion
On March 4 Microsoft completed its acquisition of Nuance Communications, a developer of conversational AI and ambient intelligence technologies used in applications across a range of industries including health care, financial services, retail and telecommunications.
Microsoft first announced the $19.7 billion acquisition, one of the largest in Microsoft’s history, in April 2021.
Nuance is now part of Microsoft’s Cloud + AI Group. The Nuance technology is being used to develop cloud-based AI solutions around consumer, patient and employee services.
No. 7: Google Buying Incident Response Superstar Mandiant For $5.4 Billion
The security segment of the IT industry has seen a lot of merger and acquisition activity this year including Cloudflare’s $162 million acquisition of Area 1 Security and Ping Identity’s deal to be taken private by Thoma Bravo for $2.8 billion.
But perhaps the most notable acquisition in IT security this year, so far, is Google’s move to acquire incident response technology developer Mandiant for $5.4 billion in what observers see as a move to compete with Microsoft and Amazon Web Services. (Microsoft reportedly was considering a bid to buy Mandiant before Google’s deal.)
Acquiring Mandiant will significantly expand Google’s cybersecurity capabilities in real-time threat intelligence and incident response.
The deal came just four months after Mandiant sold its network, endpoint and email security product business to Symphony Technology Group for $1.2 billion.
The acquisition, which the two companies expect to complete by the end of the year, moved one step closer to completion in July after the U.S. Department of Justice said it had ended its antitrust inquiry with no objections to the deal.
No. 6: Intel To Advance Its Foundry Strategy With $5.4 Billion Tower Semiconductor Acquisition
A core component of Intel’s long-term “IDM 2.0” strategy is increasing its manufacturing capacity, including building a pair of new fabrication plants in Ohio and Arizona and expanding manufacturing capacity in Europe.
In February Intel reached a deal to buy Israeli chipmaker Tower Semiconductor for $5.4 billion in a move the company said would significantly advance its plan to manufacture chips for other companies through Intel Foundry Services.
Tower operates a network of chip manufacturing plants that will complement Intel’s fabrication plants in the U.S. and Asia.
In addition to gaining more manufacturing capacity, Intel will gain Tower’s portfolio of specialty technologies, including radio frequency, power, silicon-germanium and industrial sensors. Intel will also obtain access to Tower’s extensive IP and electronic design automation partnerships.
The companies expect to complete the acquisition in early 2023.
No. 5: Citrix And Tibco To Be Acquired, Merged In $16.5 Billion Private Equity Deal
On Jan. 31, confirming reports that had been circulating for weeks, Citrix Systems announced a deal to be acquired by Vista Equity Partners and Evergreen Coast Capital (an affiliate of Elliott Investment Management) in an all-cash deal valued at $16.5 billion.
Citrix, a provider of digital workspace, virtualization and application delivery systems, will then be merged with Tibco Software, a developer of data management, integration and analysis software that has been owned by Vista since 2014.
Although the companies had initially said they expected to wrap up the acquisition by midyear, completion of the deal is still pending.
Citrix, which will retain its name and Ft. Lauderdale, Fla., headquarters, said combining the Citrix and Tibco product portfolios would provide customers with the secure application and information access and insight needed for accelerating digital transformation and navigating hybrid work models.
No. 4: HP Buying Poly In $3.3 Billion Deal In Move To Boost Hybrid Office Offerings
HP Inc., a leading provider of PCs, laptops and printers, announced on March 28 a blockbuster deal to acquire Poly, a global provider of videoconferencing hardware, conference phones and headsets, for $3.3 billion.
HP is pursuing the acquisition because it sees an opportunity to provide an expanded portfolio of products for hybrid work. The COVID-19 pandemic forced millions of people to work from home over the last two-plus years and many businesses and organizations have adopted a hybrid model where employees split their time between the home and their work offices. That has spurred demand for all kinds of IT products and services including personal computing devices and collaboration, communications and video conferencing software.
The acquisition is expected to provide HP channel partners with an expansive hybrid work product portfolio to work with.
HP said it expects to complete the acquisition by the end of this year.
No. 3: AMD Completes $49 Billion Xilinx Buy In Semiconductor Industry’s Biggest Acquisition
On Feb. 14 chipmaker AMD completed its acquisition of Xilinx, allowing AMD to expand beyond its core CPU and GPU product lineup to add reprogrammable chips, called field programmable gate arrays, to its technology portfolio.
The acquisition is expected to significantly expand AMD’s opportunities in data centers, embedded computing and telecommunications. Xilinx also had a presence in other markets including defense, broadcast and consumer electronics. Altogether the acquisition grew AMD’s total addressable market to $135 billion from $80 billion, according to the company.
The cost of the all-stock acquisition deal was originally $35 billion when it was announced in October 2020. But the double-digit growth of AMD’s share price since then boosted the deal’s final price tag to $49 billion—the largest acquisition deal in the history of the semiconductor industry.
No. 2: Kaseya’s $6.2 Billion Acquisition Of Rival Datto Ignites Controversy
Kaseya, a developer of IT management tools used by businesses and MSPs, shook up the MSP space on April 11 when it announced an all-cash deal to acquire rival Datto for $6.2 billion.
Combining two of the biggest MSP-focused platform providers is expected to put competitive heat on rivals ConnectWise and N-able in such areas as remote monitoring and management, security and professional services.
Kaseya CEO Fred Voccola touted the acquisition as providing its global customers with “more functional, innovative and integrated solutions.” Datto CEO Tim Weller said the deal “brings together a broader array of technology products to create additional opportunities for MSPs.
But the acquisition has been controversial with concerns about the impact on Datto employees and that company’s MSP-focused culture. A frowny-face emoji reaction to the deal, posted three days after the announcement by an executive at a security tech vendor, ignited a social media firestorm that included vitriolic comments berating Kaseya.
In an interview with CRN two weeks after the acquisition deal was announced, Voccola tried to assuage the fears and criticisms, saying Kaseya was firmly committed to investing in Datto’s strong channel culture, product set and brand and said there were no plans to shutter any Datto offices.
“We’re spending $6.2 billion to buy an awesome company,” Voccola said. “We don’t buy companies to gut them for profit. Every acquisition we’ve done, we’ve doubled or tripled or in some cases quintupled the amount of investment in the products and support in the business. We’re not buying Datto to destroy it. We’re buying Datto because we want to get better at that, and Datto is the best, so we buy the best.”
The acquisition was officially completed on June 23. That week at Kaseya’s ConnectIT conference Voccola sought to reassure Datto employees, partners and customers and provided more details about Datto management changes—including the departure of Weller—and plans for combining the Kaseya and Datto technology portfolios. “It’s our job to make sure that we build the best freaking platform for our customers because they rely on us to make sure it’s complete,” he said.
But closing the deal didn’t end the controversies. Datto founder and former CEO Austin McChord posted a blistering diatribe on GitHub and LinkedIn saying that post-acquisition changes were destroying the Datto Culture. “This sucks,” McChord wrote in the posting. “It feels like you just bought a leading football team and are in the process of breaking all the players legs. This is not a winning strategy. It will hurt the entire MSP industry.”
Kaseya CFO Kathy Wagner later issued a statement disputing McChord’s comments, saying his post included “false information” and that Kaseya planned “zero changes” to Datto employee benefits.
No. 1: Broadcom To Acquire VMware In Blockbuster $61 Billion Deal
On May 26 Broadcom, a $27 billion supplier of semiconductor and infrastructure software products, and virtualization technology leader VMware disclosed an agreement for Broadcom to acquire VMware in a cash-and-stock deal valued at $61 billion. The announcement confirmed circulating reports of acquisition negotiations.
The acquisition deal came less than seven months after VMware, which had been majority-owned by Dell Technologies since 2016, became an independent, publicly traded company.
“Together with Broadcom, VMware will be even better positioned to deliver valuable, innovative solutions to even more of the world’s largest enterprises,” said Dell Technologies CEO Michael Dell, in a statement. (Michael Dell retained a 40 percent stake in VMware following its spin-off.) “This is a landmark moment for VMware and provides our shareholders and employees with the opportunity to participate in meaningful upside.”
“By adding VMware, we will bring significant scale to Broadcom’s software business, and reinforce our position as a premier provider of mission-critical platform solutions to enterprises globally,” Broadcom CEO Hock Tan told investors at the time of the announcement.
A 40-day go-shop period, during which VMware could consider other acquisition offers, ended in early July with no other suitors. The companies expect to complete the acquisition during Broadcom’s fiscal 2023, which begins Nov. 1, 2022.
Broadcom plans to integrate its current software portfolio with VMware, including technology from its earlier acquisitions of Brocade Communications Systems, CA Technologies and the Symantec enterprise security business. The company intends to invest in VMware partners, engineering and sales, Broadcom Software Group President Tom Krause promised in a blog post.
But VMware partners, customers, employees and other stakeholders have expressed skepticism about VMware’s future as part of Broadcom. VMware employees, at an online town hall in May following the acquisition news, voiced concerns about cultural synergies and asked: “Why should we stay?’ And a top executive at one national VMware partner, in an interview with CRN, had a message for Broadcom: “It’s a pretty simple message really: Don’t screw VMware up by forgetting about the partners.”
The acquisition has already hit one bump in that Krause, who was expected to lead VMware post-acquisition, left Broadcom on July 15 to become CEO of Citrix Systems, running that company and its Tibco Software acquisition.