The biggest enterprise technology M&A deals of 2020

The enterprise software and services landscape is constantly evolving, and mergers and acquisitions are a key facet of this change. Here’s the latest on M&A activity in tech.

The biggest enterprise technology M&A deals of 2020
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The enterprise software and services landscape is always evolving, with startups in new product categories disrupting established vendors, and well-known names combining to stay on top of the market.

For CIOs, mergers and acquisitions (M&As) in the tech space can be disruptive to 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 upcoming shifts in the technology 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 rounds up of some of the most significant M&As so far this year that could impact IT.

BMC Software buys Compuware

For all the talk of disruptive technologies, mainframes remain at the heart of many businesses today, and it is this fact — and the enterprise’s need for modernization — that fueled the March 2020 merger of two specialists in software modernization. The combination of BMC’s Automated Mainframe Intelligence (AMI) and Compuware’s product range will help enterprises manage mainframes as part of their DevOps strategies. Compuware last changed hands for around $2.4 billion in 2014 in a buyout by private equity firm Thoma Bravo, which took the company private and split it into two entities, Compuware’s mainframe software business and Dynatrace, which was spun out to focus on software management. BMC isn’t saying how much it paid for Compuware this time around.

Cincinnati Bell sells to Brookfield … or maybe Macquarie

Enterprises in Cincinnati, Ohio, or Hawaii may soon find their local telco is under new ownership. In December 2019, it seemed a done deal that Brookfield Infrastructure Partners would acquire Cincinnati Bell for $2.6 billion. In early March 2020, though, Cincinnati received a higher offer from Macquarie Infrastructure and, after a short bidding war, broke off the engagement to strike a deal with Macquarie. Customers counting on Cincinnati’s ambitious fiber upgrade and 5G rollout plans may have dodged a bullet: Brookfield, the rejected suitor, focuses on generating stable cash flows from minimum maintenance capital expenditures.

Clarivate Analytics buys Decision Resources

Data vendor Clarivate closed its $950 million purchase of Decision Resources in March 2020. Clarivate gathers information about trademarks, patents, scientific research and industrial standards, selling the databases to enterprises under a variety of brands. CIOs that want to hang on to valuable domain names might already know Clarivate’s MarkMonitor brand. With the acquisition of Decision Resources, Clarivate now has a greater range of data about the medical and health care industries at its disposal.

Salesforce buys Vlocity for $1.3 billion

Vlocity is one of Salesforce’s biggest cheerleaders: It builds industry-specific CRM solutions on top of Salesforce for communications, government, health, insurance, media and utility companies. Salesforce’s February 2020 acquisition of Vlocity will reinforce its vertical-market offering. It took a big step in this direction in September 2019, adding consumer goods and manufacturing clouds to the banking, financial services and life sciences CRM tools it already offered.

Kronos merges with Ultimate Software

Human capital management (HCM) software vendors Kronos and Ultimate announced their merger in February 2020, although it’s a wonder it didn’t happen a year earlier. That’s when private equity firm Hellman & Friedman, already the majority owner of Kronos, took control of Ultimate too. Kronos’ CEO Aron Ain is staying on to head the combined company, while Ultimate CEO Adam Rogers is leaving. For now, both companies’ product lines will be maintained.

Koch Industries takes full control of Infor

ERP vendor Infor was already 70 percent–owned by Koch Industries, a privately held industrial conglomerate with interests in minerals, manufacturing, chemicals and commodities. In February 2020 it agreed to buy the remaining stake in Infor from founding investor Golden Gate Capital. Koch Industries plans to make Infor a standalone subsidiary operating under its current management. Infor’s development of industry-specific cloud suites could receive a boost from its closer ties with the industry giant. Infor had previously been ramping up for what had been expected to be a significant IPO.

Moody’s buys Regulatory DataCorp for $700 million

Regulatory DataCorp offers a range of risk intelligence and compliance screening services for enterprises, including anti-money-laundering, know-your-customer and due-diligence solutions. In February 2020 credit rating agency Moody’s acquired it for $700 million.

Visa acquires Plaid Technologies for $5.3 billion

Plaid Technologies started up as an API platform that enabled app developers such as Betterment and Venmo to build mobile apps with which consumers can access their accounts at traditional financial institutions. Later, it added a layer of analytics to the data it provided. In January 2020 it became a subsidiary of Visa, where it will operate as an independent business unit.

Insight Partners buys Veeam for around $5 billion

Backup software vendor Veeam is now under U.S. control. Investment fund Insight Partners has acquired the company, founded by Russians Andrei Baronov and Ratmir Timashev and headquartered in Switzerland. Insight will move its headquarters to the U.S. and install chairman Bill Largent as CEO, replacing Baronov. The new owner plans to invest more in Veeam’s hybrid cloud strategy and international expansion, while the company’s Americanization could open up the U.S. government market too.

ServiceNow buys Passage AI

ServiceNow has been building AI assistance into its Now Platform for workflow management for a while, but when it comes to natural language processing that language has all too often been English. With its January 2020 acquisition of Passage AI, ServiceNow will add multilingual conversational capabilities to its chatbots, potentially opening up new markets for its users.

AMN Healthcare buys Stratus Video for $475 million

In the light of the subsequent spread of coronavirus, AMN Healthcare’s January 2020 acquisition of a service provider offering video-based language interpretation for the healthcare industry looks prescient. Stratus Video offers federally mandated language interpretation services over remote video link to help medical professionals communicate with patients with limited English.

F5 Networks buys Shape Security for around $1 billion

F5 Networks’ $1 billion acquisition of Shape Security, completed in January 2020, will beef up the protection of its application delivery network business. Shape offers fraud protection for web and mobile applications by analyzing the flow of data into them, and F5 already plays a role in handling that data in many enterprises.

Hitachi buys Hitachi High-Technologies for $4.9 billion

We’ll mention this one here because there was so much money involved, but chances are you barely noticed the change after this deal closed in January 2020. Japanese conglomerate Hitachi is taking its holding in industrial equipment maker Hitachi High-Tech from 51.73 percent to 100 percent and dropping three syllables from its name. The subsidiary makes semiconductor manufacturing equipment — the machines that make the chips for servers — but Hitachi’s main focus here is improving the profitability of the subsidiary’s other business line, medical equipment, through the use of the parent company’s experience in AI and data analytics.

Copyright © 2020 IDG Communications, Inc.

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