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ANALYSIS: All Mergers and Acquisitions in 2011

The year of HDD consolidation

Since more than a decade we analyze the merger and acquisition trends in the worldwide storage industry, which has allowed us the proper perspective from which to gauge the evolution over time.

NUMBER OF ACQUISITIONS SINCE 1998
IN THE STORAGE INDUSTRY

1998     47
1999     57
2000     61
2001     64
2002     45
2003     52
2004     51
2005     74
2006     105
2007     88
2008     72
2009     48
2010     66
2011     57
TOTAL  887
(Source: StorageNewsletter.com)

In 2006, there was a record of 105 M&As, but then the number of deals decreased yearly until 2009 with 48, and then increased to 66 in 2010 with four ones at more than one billion dollar:

  • 3par by HP for $2,350 million,
  • Isilon by EMC for $2,250 million, and
  • Numonyx by Micron for $1,270 million

The movement was going down in 2011 with 57 acquisitions, -14% compared to 2010.

Last year the biggest ones were:

  • Autonomy by HP for $10,300 million
  • Hitachi GST by WD (to be completed after the agreement of the China’s regulatory body) for $4,300 million
  • Samsung HDD by Seagate (just completed) for 1,375 million
  • 49% of Huawei Symantec by Huawei for $530 million
  • Engenio (LSI) by NetApp for $480 million
  • Anobit by Apple (to be officially confirmed) between $400 and $500 million
  • SandForce by LSI for $370 million
  • Clearwell Sytems by Symantec for $390 million
  • Pliant Technology by SanDisk for $327 million

Excluding Autonomy bought by HP, an operation relatively related to storage, 2011 will be remember as the year of HDD consolidation, Seagate and WD buying respectively Samsung HDD and Hitachi GST, to reduce the number of disk drive manufacturers to only three (with Toshiba).

TOTAL AMOUNT OF ACQUISITIONS SINCE 1998
(here we include only the acquisitions
when their price is known)

  ≠  of
Acqui-
sitions
Total
Amount*
Price
Average*
 1998  24  61,030  2,543
 1999  22  3,062  139
 2000  38  14,021  369
 2001  27  28,279  1,047
 2002  21  3,101  148
 2003  29  5,494  189
 2004  26  4,781  184
 2005  42  18,690  445
 2006  53  17,366  328
 2007  32  6,855  214
 2008  27  5,715  212
 2009  19  10,458  550
 2010  24  10,548  439
 2011  26  19,431  747
 TOTAL  410  208,832  509

* In US$ million
(Source: StorageNewsletter.com)

Looking at the total amount spent by the buyers – when the price of the acquisition has been revealed -, it was $19.4 billion in 2011 for an average of $747 million by deal, the highest figures since 2002.

Historically, EMC is the most voracious with 66 acquisitions since 1994 but is much more quieter now. The company acquired only one storage firm in 2011, and a small one, Zettapoint, to be compared to 23 deals in 2007 only. Historically EMC is largely in front of Seagate with a total of 29 acquisitions, LSI 17, Veritas Software (now Symantec) 18 (or 33 with Symantec), IBM 16 and Iron Mountain 15.

Imation records six acquisitions in 2011, but small ones. Dell was the leader in 2010 with five ones.

Last year, we were lucky to predict that the acquisition movement will be reduced in 2011 because the big ones took a pause after spending a lot of money in 2010 and taking time to digest their acquisitions. The consolidation will continue in 2012 as some publicly-traded companies are in bad shape and because there are too many storage start-ups trying to survive with the only goal to be acquired or to dye. But we see a relatively quiet year as huge storage companies, generally the buyers, will struggle with the economical crisis.

We will probably continue to see several M&As in the channel storage market as usual (8 in 2011) and in the cloud market, especially in online backup, because there are too many companies in this activity. There was already 7 deals in the sector in 2011 and the same number around SSDs, in front of security in connection with storage (6 operations including 3 by Imation).

                                           WHO BOUGHT WHOM IN 2011 …
manda_2011_1_540
  (Source: StorageNewsletter.com)

                                          … WHO BOUGHT WHOM IN 2011
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  (Source: StorageNewsletter.com)

More than $1 billion M&As in the storage industry
2001: Compaq by HP, $25,000 million
2005: Veritas by Symantec, $11,000 million
2011: Autonomy by HP, $10,300 million
1998: Digital Equipment by Compaq, $9,600 million
2009: Sun by Oracle, $7,400 million
2011: Hitachi GST by WD, $4,300 million
2005: StorageTek by Sun, $4,100 million
2000: Sterling Software by CA, $4,000 million
2000: Seagate by Suez Acquisition, $4,000 million
2006: Agere by LSI, $4,000 million
2008: Foundry Networks by Brocade, $2,600 million
2010: 3par by HP, $2,350 million
2010: Isilon by EMC, $2,250 million
2009: Data Domain by EMC, $2,200 million
2006: RSA by EMC, $2,100 million
2002: IBM HDD by Hitachi, $2,050 million
2000: Cobalt Networks by Sun, $2,000 million
2004: Kroll by Marsh & McLennan Companies, $1,900 million
2006: Maxtor by Seagate, $1,900 million
2000: Ancor Communications by QLogic, $1,700 million
1998: Seagate Software by Veritas, $1,600 million
2006: FileNet by IBM, $1,600 million
2006: msystems by SanDisk, $1,500 million
2007: EqualLogic by Dell, $1,400 million
2011: Samsung HDD by Seagate, $1,375 million
2000: Quantum HDD by Maxtor, $1,300 million
2003: Legato by EMC, $1,300 million
2010: Numonyx by Micron, $1,270 million
1996: Cheyenne by CA, $1,200 million
2010: Division 5 Technology by Max Stiegemeier (GCF), $1,200 million
1999: Data General by EMC, $1,100 million
1995: Conner Peripherals by Seagate, $1,040 million
(Source: StorageNewsletter.com)

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