Apple, Oracle are the “Gold Standard” in Tech M&A; 5 mistakes the others make
We’ve dealt with hundreds of tech buyers over 25 years. Apple and Oracle are head and shoulders above the rest, for the thorough, discreet, structured, and efficient way they execute a large number of deals each year.
What are the most common mistakes other large tech buyers make (repeatedly)? Our top 5 list:
World number one carrier billing company created
We break our tradition of not publicizing our client work to congratulate the leadership of both Boku and mopay AG on today combining to create the world leader; Magister advised mopay on the transaction. We don’t often get to work on a deal which creates a real world market leader, reaching 5 billion mobile users in 80+ countries.
Perception minus reality equals value
How can a fast-growth tech company get sold for $1 billion+ before their 100th employee, or even their first $ of profit?
It’s not the thick smoke in the air in Silicon Valley.
RocketFuel’s announced acquisition of [x+1] is the first major combination of two significant, independent AdTech companies in the current M&A wave, combining a leading DSP and DMP to create a more holistic (and more SaaS-like) platform.
$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.