Scott Denne is a Senior Analyst with 451 Research, where he helps direct the firm's coverage of technology mergers and acquisitions. He also contributes to 451 Research's Customer Experience & Commerce Channel with coverage of the advertising technology industry.
Prior to joining 451 Research, Scott spent six years at Dow Jones, where he covered startups and venture capital for VentureWire, Private Equity Analyst and The Wall Street Journal.
Coronavirus' impact on the economy may sap the will to print new deals, yet the effect it's had on stock markets has already hampered the way buyers have been paying for their purchases lately. Buyers spent a record amount of their own stock acquiring tech vendors last year and continued to do so in early 2020. But with the major indices down by nearly one-third, they've got a lot less equity to spend.
The newest play in the private equity playbook may be played out. Amid rising prices for tech companies, PE firms have increasingly turned to bolt-on acquisitions to lower the effective price they're paying for platform providers. Yet, as the use of that strategy has expanded, it's pushed up pricing for additive deals.
The emergence of a new set of buyers propped up the tech M&A market last year, and that's continued to be the case this year. The trend is particularly pronounced in the storage market, where the traditional buyers have evaporated as storage shifts to the cloud.
There has been buzz about the potential synergies between the two companies for several years, centering around the fact that the CRM market is maturing and specializing to require automation tools for the kind of narrowly defined processes that are confined to industry niches.
As the media and telecom giant carves out its position in a transforming television landscape, Comcast has acquired XUMO, a streaming video services provider. It's the latest in a cascade of deals as Comcast and its peers adjust to an ongoing shift in consumer viewing habits.
Two months into the new year, 2020's market for venture exits isn't shaping up to be a continuation of last year's evenly distributed liquidity. Instead, it's looking like a repeat of 2018's blockbuster-but-unbalanced returns. Intuit's $7.1bn acquisition of Credit Karma marks the latest in an unprecedented pace of mega-deals for VC-backed vendors.
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