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Among companies engaged in recent mergers and acquisitions (M&A) activity are Cisco Systems, Hewlett-Packard (HP), Oracle, Microsoft, Symantec, and IBM. The number of big deals, however, is smaller than in the past, with eight in 2004, as compared with 63 in 2000. Numbers for 2005 are similar to those of 2004. In 2005, there have been 25 public technology deals and 90 private deals. The largest percentage (47%) was in software, followed by business services,(27%), and then by Internet, electronics, semiconductors, and peripherals, with percentages falling between 3% and 9%. The current environment in 2005 is healthy for buyers, and the number of transactions valued at over $20 million is forecast to reach 1,493 in 2005, down from 1,543 in 2004. For purposes of comparison, during the strongest recent M&A period, in 1998, there were 2,755 completed transactions. The reason for the downturn is that such companies as Time Warner worry about the aftermath of irrational exuberance, and targets are also not viewed as scarce properties. Everyone is waiting for a bargain. Company boards and shareholders are closely watching possible purchases, and the increase in M&A recently has had several drivers, including the health of the technology sector and strong demand following four years in inactivity.
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Information Sources, Inc.
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