The 10 Biggest Tech M&A Deals Of 2021
From CDW’s $2.5 billion purchase of Sirius Computer Solutions and the merger of distributors Tech Data and Synnex to create an IT distribution powerhouse, here’s a look at the biggest tech corporate mergers and acquisitions that reshaped the IT industry and the channel in 2021.
The Big Get Bigger
Every year the tech industry and IT channel undergo significant changes from merger and acquisition activity, from blockbuster, mega-billion-dollar deals that can alter the market landscape overnight to smaller, more focused acquisitions that bigger players use to obtain leading-edge technologies and a competitive edge use.
And 2021 hasn’t disappointed with significant M&A deals and private equity acquisitions in cybersecurity, big data, microprocessors, cloud software, distribution
Here’s a look at the IT industry’s biggest mergers and acquisitions in 2021. Some were announced last year (or even earlier) and completed this year. Other deals have been announced but are still working their way through regulatory and/or shareholder approvals before they close.
While this list generally ranks the deals by their dollar value, we’ve also considered their impact on the IT industry and the channel.
While CDW’s acquisition of Sirius Computer Solutions had a price tag of “only” $2.5 billion, for example, we’ve ranked it high because of its outsized impact on the channel. Likewise for the Tech Data-Synnex merger that remakes the IT distribution landscape. Salesforce’s acquisition of Slack had a big ($27.7 billion) price tag.
And some merger and acquisition deals, like Nvidia’s bid to buy Arm for $40 billion, are both blockbuster-big and have the potential to reshape the industry.
Conversely, there were a number of multi-billion-dollar acquisitions in 2021 for which there just wasn’t room for a separate mention, including Cisco Systems’ $4.5 billion acquisition of Acacia Communications in March, Okta’s $6.5 billion purchase of customer identity and access management rising star Auth0 in May, and telecommunications and networking giant Ericsson’s November deal to buy Vonage for $6.2 billion.
And a number of private equity acquisitions could have made the list solely on dollar value, including Clearlake Capital’s November deal to buy Quest Software for a reported $5.4 billion.
10. Oracle Bets On Health Care With $28.3B Cerner Acquisition
Just as 2021 was drawing to a close, software giant Oracle reached an agreement to buy electronic medical records and health care IT services company Cerner for $28.3 billion in an all-cash deal of $95 per share. The companies expect to complete the acquisition in 2022.
The acquisition will expand Oracle’s already considerable presence in the healthcare IT and data management and analytics arena and creates opportunities for its partners. Cerner, based in North Kansas City, Mo., had 2020 revenue of $5.5 billion, according to the company’s website.
Once the acquisition is completed Cerner will become one of Oracle’s industry business units, which already include financial services, telecommunications, pharmaceuticals, hospitality, retail, manufacturing, construction, and government. Oracle plans to make its hands-free Voice Digital Assistant system the front-end to Cerner’s clinical systems.
The acquisition is the largest in Oracle’s history, far surpassing the company’s $10.5 billion acquisition of PeopleSoft in 2005, the $8.5 billion acquisition of BEA Systems in 2008, the $7.4 billion acquisition of Sun Microsystems in 2010 and the $9.3 billion acquisition of NetSuite in 2016.
9. Private Equity Acquisitions Take Big Data Companies Cloudera, Talend Private
Big data companies were popular acquisition targets by private equity firms in 2021.
In June, cloud data management software developer Cloudera agreed to be acquired for $5.3 billion by private equity firm Clayton, Dubilier & Rica and global investment company KKR. The all-cash deal, which paid Cloudera stockholders $16 per share, was completed October 8. Cloudera went public in 2017 and was largely controlled by activist investor Carl Icahn.
Talend, a provider of data quality and data integration software, agreed in March to be acquired and taken private by private equity firm Thoma Bravo in an all-cash deal valued at $2.4 billion. Talend shareholders received $66 per share in the deal and the acquisition was completed Sept. 2.
8. FireEye And McAfee Acquired, Remade In Series Of Private Equity Deals
In October, private equity firm Symphony Technology Group completed its $1.2 acquisition of security company FireEye and is now combining the FireEye products organization with the McAfee Enterprise security business STG bought in July for $4 billion.
The newly created company, which has yet to be named, creates a new cybersecurity industry titan with more than 5,000 employees, 40,000 customers and nearly $2 billion in annual revenue. The new company is led by former BlackBerry president and Cisco Systems SVP Bryan Palma.
The deal was the latest of a series of acquisitions during 2021 involving private equity firms and security tech developers McAfee and FireEye.
The publicly traded entity previously known as FireEye, meanwhile, has been renamed Mandiant and retains such assets as FireEye’s threat intelligence and incident response services business.
Consumer security software developer McAfee, meanwhile, disclosed a deal on Nov. 18 to be purchased for $14 billion by a group of private equity and investment firms, including Advent International Corp. and Permira Advisers LLC. The investor group said it will provide McAfee with financial and operational resources to enhance its consumer security software.
That acquisition is expected to be completed sometime in the second half of 2022. The acquisition will make McAfee, which went public in 2020, a privately held company once again.
7. Proofpoint To Be Acquired By Thoma Bravo For $12.3 Billion
In what is believed to have been the biggest enterprise cybersecurity tech acquisition ever (setting aside the earlier-mentioned $14 billion acquisition of McAfee’s consumer business), email security powerhouse Proofpoint struck a deal to be acquired by private equity firm Thoma Bravo for $12.3 billion or $176 per share in cash.
Proofpoint said the acquisition, completed Aug. 31, will provide it with the flexibility and resources to continue investing in the development of its technology.
The acquisition deal’s price tag exceeded Broadcom’s $10.7 billion purchase of Symantec’s enterprise business, Intel’s $7.6 billion acquisition of McAfee, and Okta’s $6.5 billion purchase of Auth0, which was completed May 3.
The Thoma Bravo-Proofpoint deal came during a year when merger and acquisition activity was especially high in the email security space.
In December email security provider Mimecast agreed to be acquired by private equity powerhouse Permira for $5.8 billion. That acquisition is slated to be wrapped up in the first half of 2022.
And in November software developer OpenText won a deal to buy email encryption software vendor Zix for $860 million.
6. Salesforce Closes $27.7B Slack Acquisition, Prepares For Microsoft Teams Battle
Salesforce wrapped up its $27.7 billion acquisition of collaboration vendor Slack on July 21, putting the cloud application giant on a competitive collision course with rival Microsoft and its Teams software.
Salesforce originally confirmed the Slack acquisition deal, the largest in the company’s history, in December 2020. Slack will become an operating unit of Salesforce led by current Slack CEO Stewart Butterfield and his management team.
At the time of the acquisition deal announcement Salesforce CEO Marc Benioff said the plan is to make the Slack collaboration application the front end “engagement layer” for the entire Salesforce cloud application portfolio – the Salesforce Customer 360 platform.
The two companies are headquartered about one block apart in San Francisco.
5. AMD Closes In On $35 Billion Acquisition Of Xilinx
In October 2020, chipmaker AMD struck a deal to buy FPGA maker Xilinx for $35 billion in an all-stock deal. The acquisition is one of two on this year’s list that have the potential to remake the semiconductor industry landscape.
The acquisition plan appears to be on track for quick completion – possibly by the end of this year. The acquisition was approved by the U.K.’s Competition and Markets Authority on June 29 and the European Commission on June 30. U.S. regulators previously gave their stamp of approval for the deal, leaving just approval from Chinese authorities still pending.
With the acquisition AMD, which is primarily in the business of selling CPUs and GPUs, will expand its product portfolio to include reprogrammable chips called field-programmable gate arrays or FPGAs that work in a range of telecom, network, edge and industrial devices.
4. CDW To ‘Expand And Scale’ As It Closes $2.5B Sirius Acquisition
On Dec. 3, CDW wrapped up its acquisition of Sirius Computer Solutions for $2.5 billion, completing one of the largest mergers in channel history. The deal, unveiled in October, combines two of the most powerful solution providers in America: CDW, a $18 billion channel titan and No. 5 on the CRN Solution Provider 500, and Sirius, No. 21 on the Solution Provider 500.
The acquisition brings together CDW, one of the top global product providers with $18.5 billion in annual sales in 2020, and $2 billion solution provider standout Sirius. With the deal CDW looks to bolster its technical workforce, increase services revenue and generate cross-sell opportunities across the Sirius base of some 3,900 customers.
The acquisition will help CDW expand its services revenue by some 45 percent, from about $900 million in 2020 to $1.3 billion, and increase CDW’s gross margin by approximately 110 basis points. The acquisition also adds Sirius’ 2,600-plus employees to CDW’s 10,500-strong workforce.
3. Ingram Micro Completes $7.2 Billion Acquisition By Platinum Equity, Unshackled From Chinese Ownership
IT distributor Ingram Micro was acquired on July 7 by private equity powerhouse Platinum Equity for $7.2 billion, ending four years of ownership by HNA Group, a massive Chinese conglomerate.
The deal for Platinum Equity to buy Irvine, Calif.-based Ingram Micro, first disclosed in December 2020, came a little more than five years after the Chinese company bought the distributor for about $6 billion in December 2016.
HNA’s purchase of Ingram Micro was part of a heavily leveraged acquisition binge that hobbled the conglomerate’s growth, forcing it to sell off some property to make its debt payments. Reports began surfacing as far back as December 2018 that HNA was looking to sell Ingram Micro.
In December, Ingram Micro struck a deal valued at $3 billion to sell a significant piece of its Commerce & Lifecycle Services business to France-based CMA CGM Group.
Kirk Robinson, Ingram Micro’s chief country executive for the U.S., said at The Channel Company’s Best of Breed conference in October that Platinum Equity is making the investments the distributor needs to help channel partners grow. That same day Robinson disclosed that Ingram Micro had acquired cloud data center consulting company CloudLogic in a significant cloud services play.
2. Nvidia-Arm $40 Billion Acquisition Deal Faces Increasing Opposition
In September 2020 GPU powerhouse Nvidia stunned the IT industry when it announced a deal to acquire British chip designer Arm in a $40 billion blockbuster deal that has the potential to remake the semiconductor market. The announcement confirmed rumors swirling for months that Arm owner SoftBank Group (which acquired Arm in 2016 for $32 billion) had been exploring a sale.
Nvidia put the timetable for completing the acquisition at around 18 months or sometime in early 2022.
But the deal has come under fire from across the IT industry – including from chipmaker Qualcomm and IT giants Microsoft and Google – and increased scrutiny from government watchdogs. As 2021 draws to a close it’s looking increasingly unlikely the acquisition will go forward.
In August the U.K. government’s Competition and Markets Authority said Nvidia’s plan to acquire British chip designer ARM “raises serious competition concerns” and called for an in-depth investigation of the deal.
The deal’s most serious blow came when the U.S. Federal Trade Commission filed a lawsuit on Dec. 2 to block Nvidia’s acquisition of ARM, saying that the deal would “stifle innovative next-generation technologies,” including technologies for data centers.
The lawsuit, which named Nvidia, Arm and Arm’s current owner, Japan-based Softbank group, as defendants, said allowing the acquisition to proceed would “harm competition” in three global markets where Nvidia competes using ARM-based products: Arm-based CPUs for cloud-service providers, data processing units, and advanced driver assistance systems for passenger cars.
Industry analysts said the FTC lawsuit makes the Nvidia-Arm deal much more unlikely and creates uncertainty about Arm’s future.
1. Synnex, Tech Data Merger Creates $60B Distribution Titan
On Sept. 1, Tech Data and Synnex completed their $7.2 billion merger, creating the world’s largest IT distributor under the new name TD Synnex with annual sales of nearly $60 billion, 1,500 vendors on its line card, 150,000 customers and 22,000 employees.
The merger agreement was originally disclosed in March and Synnex shareholders approved the deal in June. (Tech Data was itself acquired by private equity firm Apollo Global Management in June 2020 for about $6 billion.)
Rich Hume, previously Tech Data CEO, leads the new company while Synnex President and CEO Dennis Polk is executive chairman of the company’s board.
With the merger, TD Synnex becomes the new IT distribution superpower, surpassing in revenue distributor Ingram Micro, which has held the top distributor spot for three decades.
TD Synnex brings an expanded global distribution network and extensive OEM relationships to channel partners looking to not only procure the latest IT hardware, software and services, but also complete solutions for on-premises, public cloud and hybrid cloud deployments. The distributor also now expects to have more resources to scale investments in developing new solutions and provide more financing for channel partners.
TD Synnex has already begun making changes including bringing its TechSelect, Varnex and Stellr solution provider communities under an umbrella organization called CommunitySolv. On the personnel side the company has named channel veteran Sammy Kinlaw as senior vice president of sales communities for North America. And Bob Stegner, who as Synnex senior vice president of North America marketing led the Varnex community, has been promoted to senior vice president of marketing for TD Synnex North America.