2012 Tech M&A Activity Report – Private Company Acquisitions

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2012 saw 2277 private technology companies acquired globally. Acquirers paid $46.8B for targets (in deals with disclosed valuations) with 30% of deals accounting for 80% of the value.

Most Acquired Tech Companies Don’t Raise Outside Institutional Funding

In a big surprise, 76% of tech companies acquired in 2012 had not raised institutional investment (VC/PE) prior to acquisition. While there were no bootstrapped or strictly angel-funded billion dollar exits (of which there are few in any case), it is clear that there are a lot of tech companies being formed and sold who are able to sustain themselves on their profits, angel (friends & family) financing, etc.

Google and Facebook Most Active Acquirers

The two tech juggernauts did 12 private tech company acquisitions in 2012. Five of Facebook’s acquisitions were talent acquisitions . Google and Cisco were most frequent disclosers of private company valuations . Avnet was the surprise in the top 10 most active acquirers with a string of small, mostly tuck-in acquisitions.

50% of Exits are Less than $50 Million

While there is much fanfare when the billion dollar exits happen, they represent 2.5% of all private tech company acquisitions in 2012 (translation: they don’t happen often). More than 50% of deals are less than $50M and more than 80% of the acquisitions are less than $200M.

Getting Strategic

94% of acquisitions were made by strategic buyers. Financial sponsors comprise a small 6% of deal volume.

The West Side is the Best Side

California saw the most private tech companies acquired in 2012 which should not be all that surprising given that a majority of tech investment (both deals and dollars) goes to Cali. However, the dominance of Cali was something to behold as the state had more private tech companies acquired in 2012 than the next five states combined.

Massachusetts Not a Top 3 Destination for Acquirers

Mass remains a top market for tech VC despite losing some of its mojo to NY which has usurped the #2 spot. On the M&A front, Mass was somewhat surprisingly not in the top 3 for private tech company acquisitions in 2012 as it got edged out narrowly by Texas for the #3 spot.

India Crashes the International League Tables

The UK led international markets with the most private tech company acquisitions in 2012 followed by Canada which has a lot of momentum as of late on both the financing and exit front. Rounding out the top 3 markets globally was India suggesting that the entrepreneurial tech community is becoming more established.