Mergers and acquisitions cooled in 2022, but that didn’t stop major players such as Adobe, Microsoft, and Salesforce from completing huge deals
The Verge
Why Elon Musk is so desperate for Twitter to make money – Photo: The Verge
Fears of a recession put a damper on big acquisitions during the past year, but despite record inflation and rising interest rates, many companies still found a way to complete large deals.
While the number of mergers and acquisitions in North America during the first three quarters of 2022 grew 6.2 percent year-over-year to 13,806, the combined value of those deals fell 12 percent, to $1.71 trillion, according to PitchBook. Amid continuing geopolitical and macroeconomic uncertainty, global M&A activity fell for three straight quarters during the first nine months of the year, and in Q3 was down by 30 percent compared with the peak in Q4 2021.
“We were on a historic, historic high,” says Columbia Business School professor Donna Hitscherich, noting that after the past two years of deal frenzy, a cooling seemed due. Sometimes, however, uncertainty presents an opportunity. Research has shown that investments in M&A markets tend to do better when the market is cooler, according to Hitscherich.
Here are seven of the most significant mergers, acquisitions, and takeovers from 2022.
Salesforce buys Troops.ai
Date: July 15
Price: Undisclosed
Founded in 2016 in New York City, Troops.ai delivers revenue information to sales teams using bots in both Slack and Microsoft Teams. Co-founders Dan Reich, Scott Britton, and Greg Ratner used Slack as a conduit to pull and push customer relationship management data in Salesforce. Salesforce seemed to like the implementation, and naturally liked anything that aligned itself better with Slack, which it had acquired for $27.7 billion in 2021. Upon announcing the deal, Salesforce stated that Troops.ai would become part of Slack once the acquisition closed.
Alphabet acquires Mandiant
Date: March 8
Price: $5.4 billion
Less than a year after cybersecurity firm Mandiant spun out from its previous owner, FireEye, Google announced a huge bid to buy the company, which has offices around the world. Founded in 2004 in Virginia by Kevin Mandia, a former U.S. Air Force officer, Mandiant went through a rebrand in 2006 and raised capital from Silicon Valley investors, helping it transform into an incident-management powerhouse for businesses. The brand will live on under Google Cloud, and Google hopes to bolster its security-data gathering abilities–and bring on the company’s hundreds of security personnel.
Adobe buys Figma
Date: September 15
Price: $20 billion
Founded in 2012 by Dylan Field and Evan Wallace, Figma helps teams design products and prototypes using a cloud-based collaboration tool. While the acquisition was far from being the largest deal of the year, not many companies can fetch a $20 billion price tag after just a decade in business. San Francisco-based Figma seemed like an obvious acquisition target for software giant Adobe, but some investors may have questioned the purchase price for the startup, which had about one million users and a valuation of $500 million.
Oracle acquires Cerner
Date: June 7
Price: $28.3 billion
Oracle’s acquisition of health IT company Cerner began back in 2021 with the shared mission of providing overworked medical professionals with a suite of better digital tools in the cloud. A Mayo Clinic study found that for every hour spent with patients, doctors spend two hours working on electronic health records. Founded in 1979 and based in Kansas City, Missouri, Cerner makes cloud-based voice-interface tools. Both companies entered into the agreement seeing plentiful revenue opportunities, specifically, to expand cloud, A.I., and machine-learning tools for Cerner’s healthcare clients.
Broadcom buys VMware
Date: May 26
Price: $61 billion
When the giant chipmaker Broadcom’s deal went through to acquire the cloud-services-for-apps firm VMware, some of VMware’s investors weren’t pleased, as they’d seen Broadcom’s habit of axing staff after past acquisitions. Founded in 1998 by a group of UC Berkeley graduate students, VMware grew through two former acquisitions, including one by Dell. Its company culture was strong, independent, and tech-innovation forward. But talent there seemed as shaken by the news as were investors, and the stock fell 20 percent in the month following the deal. Currently, the EU is probing the acquisition, and whether it would stifle competition with Broadcom.
Microsoft acquires Activision Blizzard
Date: January 18
Price: $68.7 billion
In what’s become one of the most contentious deals of the year, Microsoft signaled a new era of gaming by making a major (all-cash) bet that the future of gaming is in the cloud. The deal brought well-known game franchises into Microsoft, including Warcraft, Call of Duty, Overwatch, and Candy Crush. But, by propelling itself into the position of third-largest gaming company through the deal, it attracted scrutiny from the FTC, which in December sued to block the acquisition. The FTC argued that Microsoft would withhold the gaming catalog from rivals. It was one of FTC chair Lina Khan’s most significant moves to rein in big tech, though it still needs to play out in court.
Elon Musk buys Twitter
Date: April 14 to October 27
Price: $44 billion
Before making an unsolicited bid for Twitter in April, Musk had been buying up Twitter stock beginning in January 2022, claiming he wanted to “help humanity” improve free speech. He eventually pulled out of the deal after performing some questionable due diligence. Twitter, which was founded in 2006 by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams and is based in San Francisco, sued Musk, and a very public game of poker–with no shortage of attempted bluffing–ensued. The closing of the deal seemed somewhat forced, with help from the Delaware Court of Chancery. Since, Musk has been live-tweeting his every move, not to mention his impulsive plans, too. The show is still going on, with Musk announcing on December 20 that he’ll step down as Twitter’s CEO but continue to run the company’s software and server teams. Users are enraged if engaged. Who can look away?
Source: INC
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