(Flickr photo via JMRosenfeld)

Could we see a new wave of technology-related mergers and acquisitions? Well, that’s one possible scenario given that the top 20 technology companies in the U.S. finished last year with a whopping $300 billion in cash and marketable securities, an impressive number which could indicate that companies such as Microsoft, Google, Salesforce.com and others may go on a buying spree.

However, it is worth noting, that not every tech giant is looking to use the cash for acquisitions. Apple earlier this month said it will pay out $45 billion over three years to shareholders. Of course, with nearly $100 billion in cash on the books, Apple still has enough money in the bank to make some big buys if it wants to.

According to the new PricewaterhouseCoopers’ U.S. Technology M&A Insights report, the climate is looking pretty good for M&A deals in the tech sector.

“The positive, albeit somewhat retracted, growth signals sent by the technology industry bode well for technology businesses in 2012. The industry as a whole will not be immune to the difficulties experienced by the global economy, but positive spend growth, large cash balances, and a predisposition to M&A driven by innovation, strategic objectives, and anticipated synergies are likely to keep the technology industry in the top spot for M&A activity in 2012.”

That could be good news for startup companies that are looking to cash out after years of hard work, something that Seattle online gaming companies PopCap Games and Double Down Interactive decided to pursue last year after selling to EA and IGT, respectively. In fact, online gaming was specifically cited in the report as a hot area to watch in 2012. Other areas included social networking; mobile wallets; big data; coud computing and security.

Overall, technology M&A deals declined by 21 percent in 2011 to 308 transactions. However, the total transaction deal value numbers increased to $125 billion, up from $107 billion in 2010.


H-P’s $11.3 billion bid for Autonomy Corp. was the biggest deal of the year, followed by Microsoft’s $8.5 billion purchase of Skype. Software was the biggest category for M&A deals, representing a third of the total transaction value on the year with $41 billion spent. That was up from just $28 billion in 2010.

Internet deals also saw a healthy increase, with a total transaction value of $22.8 billion. That was up from $13 billion in 2010. Microsoft’s purchase of Skype led the way in that category.

Here’s a look at the overall spending by size of deal in 2010 and 2011:

 

Comments

  • Guest

    I’d expect Apple to make more small investments for large returns and MS to keep making more large ones for small or probably even negative ROI.

  • Joe M.

    “H-P’s $11.3 billion bid for Autonomy Corp. was the biggest deal of the year, followed by Microsoft’s $8.5 billion purchase of Skype.”

    Not sure how either of these is relevant, or maybe the charts you are showing aren’t.  Both of these acquisitions were made overseas, with funds stuck overseas because of uncompetitive tax rates domestically.

    Has their been a significant US acquisition by Microsoft since aQuantive?  Their 10k seems to indicate if they were to buy anything in the U.S., they would have to add a 15-20% premium for repatriation, as well as bring into uncertainty that funds overseas are permanently reinvested and expose those earnings to additional U.S. income taxes.

    • Guest

      “Has their been a significant US acquisition by Microsoft since aQuantive? ”

      Define “significant”. They’ve done about 19 US deals since then. Two of which were at or close to $500 million apiece.

    • http://www.nickwhite.me/ Nick White

      Why should relevance be determined or even affected by whether the acquisitions were international or domestic?

      • Guest

        I think his point is that the final graphs read “US technology deals”, while the ones he mentioned are overseas.

        • Joe M.

          Correct.  The deals mentioned are overseas, while the charts and discussion are U.S. based.  There is no money here, it is stuck overseas.  Look to the “US Corporate Cash Pile Totals $1.2 Trillion” report from Moody’s for more info.

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