After weathering one of the most dismal years in recent history, tech M&A came roaring back this year for the AlwaysOn Global 250. This year, acquirers spent $5.7 billion to acquire 37 AO250 companies, more than six times the spending and three times the number of deals as in the prior—year period—and the highest number of deals we've seen since AlwaysOn began naming companies to its top 100 and top 250 lists. Last year, amid the turmoil of the credit crisis and its aftermath, acquirers spent just under $900 million to buy only 13 AO companies.

From what we see this year, it was a good move to wait out the storm. This year, the median deal size increased to $150 million, as compared to a median deal value of $134 million for the prior deals to date. As with previous years, most of these exits were of VC-backed companies.

For the acquirer leaderboard this year, Microsoft retained its position as the most acquisitive buyer of AO companies, but Google and Big Blue both made inroads by buying three companies each.

On the IPO front, Tesla Motors was the lone debut of an AO250 company—the company currently has a market cap nearly $2 billion. That compares with the prior 12-month period, when we saw three successful IPOs—Rackspace, OpenTable, and LogMeIn.

This year, we've also added a leaderboard of the investment banks that have advised AO Global 250 companies on the sell side. In these rankings, Goldman Sachs has the lead, with Morgan Stanley in the number-two slot, and Credit Suisse battling it out with Jefferies for third place.

This year, we added 220 new companies to the existing 564 AO companies. Here's where they are now.

M&A exits came back with a vengeance this year as acquirers snapped up more than three times as many AO250 companies as they did in the prior-year period, marking the highest number of yearly deals to date. The $5.7 billion in spending was the second highest total to date.

Median deal value for AO250 companies increased to $150 million, compared with $134 million for cumulative prior AO deals.

Most of the buying this year was by Fortune 500 companies, even more so than last year. The percentage of private acquirers also increased this year as compared to last.

In the all-important area of valuations, AO company values continue to hold their premium when compared with all private companies. The median deal value for AO companies was 6.3 times revenue for the past year, compared with a 1.6 times median multiple for the broader universe of private tech companies.

Of the 37 companies acquired this year, 32—or about 86%—were venture-backed. To date, about 80% of all acquired AO companies had received venture funding in the past.

In the most-frequent-acquirer category, Microsoft maintained its spot, but Google and IBM both came within striking distance by buying three companies each. EMC entered the list by acquiring three AO companies, as well.

In our ranking of sell-side financial advisers since 2006, Goldman Sachs took the lead in number of deals, but lost out in total announced (or estimated) deal value to Morgan Stanley. Morgan Stanley advised on three deals in the most recent year, with Goldman and Credit Suisse each advising two sellers. In all, 13 different investment banks advised two or more sellers in the past four years, while another 20 advisers consulted on one deal each.

The distribution of deals by sector remained roughly the same this year as it was previous years for AO250 exits. There was, however, a big jump in spending in infrastructure management, with six deals—more than any other sector this year.

Here is the list of AO companies acquired in the past 12 months.

About The 451 M&A KnowledgeBase
Bankers, VCs, corporate development executives, and strategists use the M&A KnowledgeBase to generate valuation comparables for private and public companies and to analyze tech M&A activity by sectors and companies. The KnowledgeBase is an M&A transactions database that offers details on more than 24,000 global IT, communications, IT services, outsourcing, and Internet transactions, categorized across more than 600 industry sectors. Leveraging the expertise of more than 45 industry analysts, the KnowledgeBase also provides in-depth analysis of key deals and offers well-corroborated estimates of deal values for key private transactions for which terms were not announced.

Features and Benefits of The 451 M&A KnowledgeBase:
 

• Hundreds of proprietary estimates of deal values and trailing revenue provide a larger, richer, and more accurate set of comparables to aid in setting post-money valuations, exit multiples, and FAS 157, and 409A valuations.
• More than 600 searchable technology sectors let users retrieve relevant comparables more quickly and precisely.
• In-depth insight on deal rationales provides important "texture" to enrich valuations and competitive analyses.

If you missed us at Stanford, contact us for a complimentary demonstration of The 451 M&A KnowledgeBase by emailing mergerinfo@the451group.com.

About The 451 Group

The 451 Group is an independent technology-industry analyst company focused on the business of enterprise IT innovation. The company's analysts provide critical and timely insight into the market and competitive dynamics of innovation in emerging technology segments.

Clients of the company—at vendor, investor, service-provider and end-user organizations—rely on The 451 Group's insight to support both strategic and tactical decision-making for competitive advantage.

The 451 Group also owns and operates two independent divisions: Tier1 Research analyzes the financial and industry implications of developments impacting public and private companies within the hosting, communications and Internet infrastructure sectors. The Uptime Institute provides education, publications, consulting, certifications, conferences and seminars, independent research, and thought leadership for the enterprise datacenter industry and for datacenter professionals.

Apply now for a complimentary trial of The 451 Group’s services.