The Eagle Blog

July – The Billion Dollar Month!

July has been a very interesting month for merger and acquisition activity in the tech world! It is unusual to see three billion dollar deals in the same month, but who can say what usual is these days!

First we heard that EMC, one of the world leaders in storage systems was buying a big name in the security world, RSA Securities for $2.1 Billion. I guess part of the thinking in synergies between storage and security might relate to all of the client information stored on EMC hardware that might benefit from better security. Certainly there have been many (and often) security breaches involving client data in recent times.

Next up was the deal I referenced a couple of days ago, ATI (the Canadian darling) snapped up by AMD for a cool $5.4 Billion. Adding a serious graphics capability to AMD’s already strong chip set creates some competitive problems for the de facto leader in that space, Intel. Of course I expect to see some kind of response from the big guy!

Finally HP is buying Mercury Interactive for $4.5 Billion. This deal will grow HP’s software business to become a $2 Billion business … and I guess the software business is definitely a higher margin business than a services arm. However, in my humble opinion (and HP didn’t ask for it for sure!) it is the services arm of HP that needs some investment, maybe that will be their next move!

So … the purse strings were loosened this month. Is it a sign of things to come? I do believe we will see more and more consolidation, I am actually surprised that we haven’t seen more Asian companies active at the Billion dollar level. Watch that space!

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