This is my 30,000 foot look at events in the ICT industry for May 2009. What you see here is a précis of the monthly report I produce, which is available in more detail at the Eagle website. You will also find back issues on the website.
Two years ago, May 2007brought some interesting, and big dollar, M&A activity much of it from private equity. Goldman Sachs and Texas Pacific Group paid $27 Billion for Alltel, the 5thlargest cell phone company in the US, Microsoft made its largest acquisition ever, paying $6 Billion for a Quantive, an internet advertising company. The other big deal was the sale of Axiom for $3 Billion, and again to equity firms.
This month last year in May 2008, saw some interesting activity on the M&A front, HP paid almost $14 Billion for EDS, there was an aborted attempt by Microsoft to buy Yahoo and CBS paid $1.75 Billion for the CNetsuite of web based sites. Everybody was guessing about the economy and the fallout of the sub-prime debt debacle … we know more now!
In May 2009there are many signs that a recovery is under way … with a collective holding of breath as we hope it holds. Oil was well into the $60 plus range and the Canadian dollar broke 90 cents US. Canada’s trade surplus situation improved … but only because imports fell more than exports! Several reports released this month indicate a recovery is expected; The Global Technology Distribution Council say the downturn has leveled off; the US Conference Board leading indicator rose for the first time in 7 months; Stats Canada reported the number of people employed in Canada rose, based largely on self-employed people; and Spherion’s employee confidence index was up too.
We are still seeing the reports that show some of the effects of the downturn, revenue at the large staffing companies was down 30% in the first quarter; Sony (8,000),BT(15,000),Seagate(1,100) and HP (6,000) all announced new layoffs, while Microsoft continued with its second round of planned layoffs.
On the M&A front the telcos continue to feel pain with Verizon selling off 14 states worth of wireline assets to Frontier Communications for $8.6 Billion. Facebook received an injection of $200 million from Digital Sky Technologies (which would value the company at $10 Billion); NetApp paid $1.5 Billion for Data Domain and Oracle followed its Sun acquisition with a smaller buy, Virtual iron Software.
That’s what caught my eye over the last month, hope this was useful and I’ll be back with the June 2009 news in just about a month’s time.