$2bn of AdTech M&A Since February, with Enterprise Buyers In the Middle of the Froth
AdTech M&A has finally started surging in 2014, with over $2bn of M&A deals since February. Functional specialists providing specific capabilities are in high demand, while more general networks are being left behind, according to new Magister Advisors research.
Enterprise buyers have featured prominently in 2014 with Oracle, SAP and dunnhumby (a subsidiary of Tesco) all driving the pace of AdTech consolidation. In fact over the past 2-3 years the top enterprise vendors have spent 4 times as much on MarTech & AdTech acquisitions as the internet “majors.”
Dilution (Really) Doesn’t Matter
Most founders contemplating a large €20m+ investment round immediately calculate their percentage ownership ‘post-dilution’ (meaning what they owned immediately before the funding round, versus what they own the second after it closes).
Suarez To Barcelona: A Deal Structuring Lesson
Let’s imagine Liverpool’s sale of Luis Suarez for £75m to Barcelona as an M&A deal that needs careful structuring. Without knowing the real deal terms, here’s how we think it should have been structured.
No such thing as a “European” investment round anymore
US venture investors are not coming to Europe, they are already here, in VERY large numbers. They’re such a big factor in the European funding scene that the whole concept of “US VCs” and ”European VCs” is a thing of the past.
Are VCs missing the current European tech M&A wave?
So far this year has seen 50%+ more European tech M&A deals above $50m vs. last year, according to Magister’s recent analysis of European Tech M&A (see table below). A big jump in valuations and strong international buyer interest are driving the market. Amazingly VC backed companies are only 15% of this total. Are European VC’s missing out on a liquidity bonanza?
Big Data – yes, it is still a big deal
Big Data is going through Gartner’s “trough of disillusionment”. Endless articles espouse why big data is a fad, doesn’t matter or is failing.
Yes, many companies’ initial big data projects will not meet expectations. Yes, big data consultants will “overcharge” inexperienced customers. And yes, the bearded hipster with a PhD in applied mathematics, wearing skinny suit pants and carrying a steampunk laptop, will continue to annoy.
Handling an inbound approach – 5 classic mistakes
Whether a deal is $50m or $1bn; the dynamics are the same. A surprise email from a prominent acquirer expressing strong interest in a “strategic deal that could benefit both parties.”. Navigating this to a closed deal brings all the expected benefits: confidentiality, being “bought not sold”, the ability achieving a strategic price, and leverage with other buyers (“we are under offer, you need to move fast”).
But very often an approach fails to close. After 25+ years of handling such approaches, we share 5 classic mistakes
5 things you should ask your M&A advisor
If we were a prospective client, evaluating whether or not to hire a particular M&A advisory firm, here are 5 questions we would pose
$10m+ per employee exit?
At the height of the 2000 bubble, the scramble to buy promising early-stage businesses sent the price per employee through the stratosphere, to $10m+ at the peak. That meant a 20-person business, just getting market traction, could be valued at $200m. In hindsight, it was “insane”. Today this “insanity” is happening again.