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Despite a slow-down in the latter half of the year, 2022 saw mergers or acquisitions involving 1,837 enterprise software companies, up 8% on the previous year.

That’s according to Hampleton Partners, which noted that the share of those acquisitions made by private equity firms fell to 36%, the lowest for six years. It blamed the decline on the rise in interest rates, which discourages the debt-leveraged deals private equity firms specialize in.

Although interest rates remain high, private equity firms were behind two of the biggest acquisitions to close so far in 2023: Silver Lake’s $12.5 billion purchase of Qualtrics, and Thomas Bravo’s $8 billion deal for Coupa Software.

Based on the number of deals through September 2022, deal advisor Hampleton Partners forecast that merger activity for the full year would be 19% higher than in 2021, with deals also growing larger, and valuations as a multiple of earnings also increasing.

A survey published by law firm Morrison Foerster in November 2022 found that 80% of private equity firms and 71% of corporates expect tech M&A deal volumes to increase over the next 12 months. AI will be the hottest market sector for deals, according to 51% of respondents (up from 3% last year), with cloud favored by 31% (down from 54% last year).

There’s also increasing demand for IT security consulting companies, Hampleton Partners said, and our colleagues at CSOonline have the rundown on cybersecurity M&A activity.

The top enterprise technology M&A deals of late 2022 and early 2023 included acquisitions of Qualtrics, Coupa Software, VMware, and Citrix. For CIOs, these deals can disrupt strategic rollouts, spell a need to pivot to a new solution, signal sunsetting of essential technology, provide new opportunities to leverage newly synergized systems, and be a bellwether of further shifts to come in the IT landscape. Keeping on top of activity in this area can also help your company make the most of emerging opportunities and steer clear of issues that often arise when vendors combine.

Here, CIO.com rounds up some of the most significant tech M&As of the last 12 months that could impact IT.

April

Ciphr adds diversity with Marshall acquisition

Marshall E-learning, a provider of diversity and inclusion training, is now part of Ciphr, a UK-based HR SaaS platform. Ciphr expects the deal will enable it to expand its existing online learning offering.

March

Silver Lake buys Qualtrics for $12.5 billion

Qualtrics has changed hands again. SAP acquired it for $8 billion in 2018, but the graft didn’t take, and SAP soon sold a minority stake. Now Silver Lake and the Canada Pension Plan Investment Board have snapped up the whole company. SAP will remain a go-to-market partner of Qualtrics and service their joint customers.

Quantive buys OKR consulting firm

Following its acquisition of consulting firm AuxinOKR, strategy execution platform Quantive is rolling out a new consulting division to support enterprises adopting its tools for measuring business results.

Quantexa is loving the Aylien

Quantexa has acquired Aylien, a Dublin-based natural language processing firm specializing in risk management and market insight. It will use Aylien’s NLP skills to enhance its AI-based decision intelligence tools for the finance industry.

Capita lays off employment screening business

Matrix SCM, a British IT staffing agency, has acquired Security Watchdog, a provider of employment screening services, from Capita, the giant IT services business. It’s part of a broader sell-off for Capita, which also let go of three other human resources companies in March: Capita Resourcing, HR Solutions, and ThirtyThree. Capita is selling non-core businesses to reduce its debts, and refocusing on public sector and customer experience work.

Key secures Rocket

Mainframe software developer Rocket Software has bought mainframe security specialist Key Resources. The deal will help Rocket better secure its software, and offer additional security-related services to the mainframe users it works with.

February

Thomas Bravo manages $8 billion spend on Coupa Software

In an $8 billion deal, investment firm Thomas Bravo acquired Coupa Software, a provider of business spend management tools. Abu Dhabi Investment Authority has taken a minority stake. Thomas Bravo also owns business payments company BottomLine, open finance platform Solifi, data management tool Talend, and a raft of security and identity management software companies.

Arm sells software arm

Processor designer Arm has sold Forge, its suite of software development tools for high-performance computing, to Linaro, which develops and supports a range of other Arm-specific software for enterprises. Arm originally acquired Forge in 2016 to support its entry into the HPC market.

Accenture buys Morphus, adds new South-American cybersecurity center

With its acquisition of Brazilian cybersecurity and threat intelligence provider Morphus, Accenture has added a new site from which to supervise its offering of managed security services and advanced analytics. The cyber fusion center in Fortaleza, Brazil, was previously Morphus Labs.

Broadcom and VMware kick merger can further down road

Broadcom first offered to buy VMware in May 2022, and VMware’s shareholders agreed to the deal in November, but still the deal isn’t done. Now the two companies have formally given themselves until May 2023 to close the acquisition, and Broadcom representatives say the deal will close by the end of the company’s fiscal year, on October 30, 2023.

January

Dell buys Cloudify

After selling off its stake in VMware, Dell is moving back into the cloud software business with the acquisition of Cloudify. The Israeli startup has developed a cloud orchestration platform to help devops teams automate provisioning.

McKinsey buys machine MLops platform Iguazio

McKinsey is adding to its stable of machine learning experts with the acquisition of software developer Iguazio. In time, it plans to integrate it into QuantumBlack, a McKinsey business unit that has specialized in AI for the last decade. Iguazio is the developer of a commercial MLops platform and two open-source tools: MLRun, for ML pipeline orchestration, and Nuclio, which offers real-time serverless functions for automating application deployment.

HPE buys Pachyderm to automate ML development

Pachyderm, a developer of data pipeline automation tools used in training machine learning models, is now part of Hewlett-Packard Enterprise. The company’s software will become part of the HPE Machine Learning Development Environment.

Quantum fusion: IonQ ties up with Entangled Networks

With each of the handful of companies developing quantum computers betting on a different architecture, a cross-platform quantum computing operating system is still a way off. That’s why quantum hardware companies like IonQ are developing their own software tools too. To speed up the process, IonQ has acquired Entangled Networks, a developer of software optimization tools for quantum computers, and is building a new Canadian subsidiary around the software team.

Two ServiceNow partners tie the knot

ServiceNow solutions provider Thirdera has acquired another ServiceNow partner, SilverStorm Solutions, to expand its reach in Europe. Thirdera also operates in South America. Combined, the two ServiceNow Elite-level partners have over 900 employees.

For last year’s mergers and buyouts, see The biggest enterprise technology M&A deals of 2022.

Mergers and Acquisitions, Technology Industry

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

The first half of 2022 was one of the busiest on record for M&A activity, according to risk management advisor Willis Towers Watson: Only 2021 and 2015 were busier. But deals are taking longer to close, on average, and are not always beneficial to buyers, who underperformed the wider stock market by 4.8 percentage points, WTW said.

That’s not stopping enterprise software and service providers, though: They are continuing to buy their way into new markets and to acquire new capabilities rather than develop them in house.

For CIOs, these deals can disrupt strategic rollouts, spell a need to pivot to a new solution, mean the potential sunsetting of essential technology, provide new opportunities to leverage newly synergized systems, and be a bellwether of further shifts to come in the IT landscape. Keeping on top of activity in this area can help your company make the most of emerging opportunities and steer clear of issues that often arise when vendors combine.

Here CIO.com rounds up of some of the most significant tech M&As of recent months that could impact IT.

IBM observes gap in its portfolio, buys Databand.ai

IBM has acquired Israeli data observability specialist Databand.ai to beef up its IT operations performance management portfolio alongside Instana APM and IBM Watson Studio. Since CEO Arvind Krishna took over in April 2020, IBM has been pursuing a strategy of making small acquisitions — over 25 of them so far — to fill gaps in its offerings.

Ensono adds AndPlus to portfolio

Managed solutions provider Ensono has bought AndPlus, a data engineering firm, continuing a run of acquisitions of small cloud consulting companies: In January, it snapped up ExperSolve, which specializes in moving and modernizing mainframe applications, and last year bought Amido. Ensono is owned by KKR, the owner of BMC Software.

IFS adds Ultimo to its EAM offering

IFS has expanded the enterprise asset management (EAM) capabilities of its ERP platform with the acquisition of Dutch software vendor Ultimo. IFS will continue to offer Ultimo’s software as a stand-alone solution.

ParkourSC adds IoT to SCM

ParkourSC, a Silicon Valley supply chain software company backed by Intel Capital, has bought IoT networking company Qopper, which was founded by ParkourSC CTO Alok Bhanot.

Zendesk goes private at knock-down price

CRM vendor Zendesk has agreed to be acquired by investment firms Hellman & Friedman and Permira. The two investors will pay around $10.2 billion to take Zendesk private, they announced on June 24. It’s a bargain for Permira and H&F, which also own stakes in cloud customer contact center vendor Genesys: In February, as part of a consortium of bidders, they offered $17 billion for Zendesk, which turned them down saying the offer undervalued the company. At around that time, Zendesk abandoned plans to buy Momentive Global (formerly Survey Monkey) for around $4 billion.

IBM to buy Randori

IBM has bought Randori, a specialist in attack surface management and offensive cybersecurity. It’s Big Blue’s fourth acquisition this year, after buying cloud consultants Neudesic and Sentaca in February, and environmental performance management company Envizi in January.

ServiceNow to buy Hitch Works

ServiceNow has agreed to buy skills mapping company Hitch Works, with the goal of helping its customers fill talent gaps through staff training.

ICF cements links with government health agencies

Digital transformation consulting company ICF is adding to the services it offers US government clients with the acquisition of SemanticBits, a health services software provider. Late last year it also bought health analytics vendor Enterprise Science and Computing (ESAC) and service provider Creative Systems and Consulting, both of which serve US federal agencies.

Epicor adds EDI to its ERP platform with Data Interchange buy

Epicor continues to expand its ERP platform capabilities through acquisition. On June 7, it bought UK-based Data Interchange, the operator of a global EDI network and developer of software for order processing and EDI mapping.

ScanMarket joins Unit4

SaaS ERP vendor Unit4 has bought source-to-contract cloud software vendor ScanMarket to beef up its source-to-pay offering to midmarket service industry customers.

McKinsey buys data architecture and engineering company

McKinsey doesn’t just advise on mergers and acquisitions; it also makes them. A case in point: Its June 1 purchase of Caserta, the company that built its internal knowledge management platform. McKinsey expects the acquisition to benefit its data transformation work for its clients.

Instaclustr continues acquisitive streak for NetApps

NetApps closed its acquisition of Instaclustr on May 24. The service provider supporting open-source database, pipeline, and workflow applications in the cloud will join the Spot by NetApp portfolio, the collection of SaaS tools built around the cloud management and cost optimization company NetApp bought earlier in 2022.

Panasonic plans IPO of recent acquisition Blue Yonder

Barely a year after buying Blue Yonder, a vendor of supply-chain management software as a service, Panasonic is looking to sell it again as it pursues a new strategic direction. Panasonic said in mid-May that it will combine Blue Yonder with its Gemba Process Innovation activities and seek a stock exchange listing for the new entity. It has not set a timetable for the sale.

Augury adds process intelligence to machine health offering

Augury, an industrial IoT vendor specializing in monitoring machine health, has paid over $100 million for process intelligence vendor Seebo. Augury plans to combine the two companies’ AI-based tools to help manufacturing companies to balance quality and throughput with energy consumption, emissions, and waste.

SAP service providers join forces

Codestone Group has bought Clarivos. The two provide services around SAP’s ERP, analytics, and enterprise performance management (EPM) tools.

Perforce Software buys Puppet

Perforce Software, a privately held provider of software development tools, has agreed to buy the infrastructure automation software platform Puppet. Perforce already owns development tools such as Helix and the testing tools, including Perfecto and BlazeMeter.

Infosys buys oddity for digital marketing capabilities

The appetite of Indian IT service companies for European acquisitions is still unsated. Infosys has bought oddity, a German provider of digital marketing services that also has offices in Taipei and Shanghai. Infosys will fold oddity into Wongdoody, the US consumer insights agency it bought in 2018.

Microsoft buys Minit to optimize process automation

Microsoft has bought Minit, a developer of process mining software, to help its customers optimize business processes across the enterprise, on and off Microsoft Power Platform. The acquisition will help it extract process data from enterprise systems such as Oracle, SAP, ServiceNow, and Salesforce to identify process bottlenecks that can be optimized or automated.

NTT Data adds Vectorform to service portfolio

Global IT services giant NTT Data has bought another sliver of market share and added some new capabilities with its acquisition of Vectorform, an 80-person digital transformation consultancy based in Detroit. With Vectorform, NTT Data is looking to grow its customer experience and product development services across industries.

Celonis buys Process Analytics Factory

Process mining giant Celonis has snapped up Process Analytics Factory, a small German company specializing in process optimization on Microsoft’s platforms. Celonis started out helping enterprises optimize SAP workloads, and now its acquisition of the developer of PAFnow will help it broaden its access to the Power BI and Power Platform markets.

Equinix buys West African data center company for $320 million

Global data center operator Equinix expanded its capability and connectivity in West Africa in early April with the $320 million acquisition of MainOne, which offers services in Ghana, Nigeria, and Côte d’Ivoire. MainOne has just opened its fourth data center, in Lagos.

Nvidia buys block storage software developer Excelero

With $40 billion in spare cash to spend after its bid for chip designer Arm fell through, Nvidia is turning to smaller acquisitions to build its capabilities. In early March it announced its second of 2022, Excelero, which develops software for securing and accelerating arrays of flash storage for use in enterprise high-performance computing.

NetApp buys Fylamynt for cloud ops automation

NetApp added some new functionality to its portfolio of cloud management tools in late February with the acquisition of Fylamynt, a young low-code cloud ops automation company. Its aim is to help customers automate the deployment of Spot by NetApp services.

Vendr buys SaaS platform Blissfully to simplify buying SaaS

SaaS vendor management platform Vendr is buying SaaS management platform vendor Blissfully. Vendr aims to offer finance and procurement teams savings on the purchase of SaaS services, while Blissfully helps enterprises identify what software they own and where they can save money.

Test automation: Tricentis buys Testim

Software test automation vendor Tricentis has bought Testim, the developer of an AI-based SaaS test automation platform, to expand its continuous testing solutions. Tricentis hopes Testim’s platform will make it easier for customers to create tests that scale and change with their software.

Phenom pairs with Tandemploy on talent experience management

HR technology company Phenom has snapped up another talent experience management company. This time it’s the German Tandemploy, which Phenom hopes will help it better recommend pairings among peers, mentors, project leaders, and subject matter experts.

Atlassian buys Percept.ai

Atlassian has acquired chatbot developer Percept AI and plans to add its virtual agent technology to its Jira Service Management IT support tool. The idea is that it will automate the gathering of necessary context before passing them to human operators to help resolve cases faster. It’s Atlassian’s sixth ITSM acquisition in four years.

Microsoft to buy Activision Blizzard for $68.7 billion

Microsoft has agreed to buy games developer Activision Blizzard, it said on Jan. 18, 2022. The price tag, a whopping $68.7 billion, dwarfs even the $19.7 billion Microsoft paid for Nuance Communications last year or the $26.2 billion it paid for LinkedIn in 2018.

Activision Blizzard’s apps are not typically authorized on enterprise networks, but there’s a chance its technology for creating and animating virtual worlds could make it into the workplace. Microsoft said the acquisition will give it the building blocks for the metaverse — a term for a virtual reality space where people interact for purposes of work or entertainment.

If so, that could make the virtual office a more pleasant sight than the blurred backgrounds and disembodied heads we see in Teams today — and prompt a wave of hardware refreshes to support the additional graphics workload.

Lansweeper acquires UMAknow

IT asset management platform Lansweeper has acquired UMAknow, the developer of Cloudockit. As Lansweeper scans on-premises computing environments, Cloudockit compiles architecture diagrams and documents users’ assets in the cloud.

Precisely buys PlaceIQ

Data integrity specialist Precisely kicked off 2022 by buying PlaceIQ, a provider of location-based consumer data. It’s Precisely’s fifth acquisition since itself changing ownership last March. Other purchases include weather data provider Anchor Point and MDM software vendor Winshuttle.

Aptean jets into Austrian ERP market

Continuing along its flight path of acquiring small regional or industry-specific ERP vendors, Aptean has bought Austrian software vendor JET ERP, its fourth recent acquisition in the country.

Indian IT services companies acquire near-shoring operations in Europe

Indian IT services provider Tech Mahindra is expanding its offering to insurance, reinsurance, and financial firms with the acquisition of Com Tec Co IT, a custom software developer with 700 staff in Latvia and Belarus skilled in modern technologies, including AI, ML, and devsecops, for €310 million, while another Indian company, HCL Technologies, has acquired Starschema, a Hungarian data- and software-engineering service provider with offices in Budapest and Arlington, Va.

Sage swallows Brightpearl

Midmarket ERP vendor Sage closed its acquisition of Brightpearl on Jan. 18. It plans to integrate Brightpearl’s e-commerce management software with its Intacct cloud-based financial applications.

Nvidia buys Bright Computing

With its giant bid for microprocessor designer ARM now abandoned, Nvidia is turning to smaller deals to bolster its capabilities. In early January, it bought Bright Computing, a developer of software for managing the high-performance computing clusters that Nvidia’s chips are used in when they’re not mining cryptocurrencies or rendering games.

Oracle buys part of Verenia’s CPQ business

Oracle has acquired Verenia’s NetSuite-based configure-price-quote business in order to add native CPQ functionality to NetSuite. Verenia retains its non-NetSuite product lines.

Mergers and Acquisitions, Technology Industry