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All M&As in 2016

Number of deals decreased to 47 compared to 51 in 2015, 65 being average per year since 1998
By Jean Jacques Maleval on 2017.01.04

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Since 1998 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 WW STORAGE INDUSTRY

Year
1998 48
1999 59
2000 61
2001 64
2002 45
2003 54
2004 51
2005 75
2006 104
2007 90
2008 74
2009 50
2010 71
2011 62
2012 76
2013 75
2014 72
2015 51
2016 47
TOTAL 1,229
Acquisitions/year 65

M&A year par year
(Source: StorageNewsletter.com)

In 2006, there was a record of 104 M&As. Since 2012, the number of deals decreased yearly to reach 47 in 2016 compared to 51 the former year, and 65 being the average per year since 1998. The  only lower figure was 45 in 2002.

And into these 47 M&As in 2016 are included eleven (ten last year) by only J2 Global getting small online backup companies. The price of only 14 deals was revealed by the buyers, meaning that it was relatively low for the 33 other ones with an amount not impacting seriously their financial results.

ALL M&As IN 2016 WITH KNOWN PRICE

Buyer Bought Price in $ million
Broadcom Brocade 5,900
OpenText Dell EMC Enterprise Content Division 1,620
Cavium QLogic 1,000
Mellanox EZchip 811
LDiscovery Kroll Ontrack 410
HPE SGI 275
Insight Enterprises Datalink 258
TA Associates StorageCraft Technology 187
DCC Hammer 47
KeepItSafe (J2 Global company) InterCloud Systems(assets) 26.1
Nutanix PernixData 10
Proact IT Compose IT System 6.4
Defenx PLC Memopal 2
StrongBox Data Solutions Crossroads Systems (assets) 1.85

(Source: StorageNewsletter.com)

What's relatively impressive in 2016 is the number of deals surpassing $1 billion, a total of 3 vs. 5 last year. The highest acquisition in the history of the storage industry, at $63 billion, was the acquisition in 2015 of EMC by Dell  - even if both of them are not in storage only - and the second one the same year ($19 billion by WD to acquired SanDisk), this latter becoming the biggest M&A in storage only.

MORE THAN $1 BILLION M&As IN HISTORY OF STORAGE INDUSTRY
(three in 2016)

2015: EMC by Dell, $63,000 million
2001: Compaq by HP, $25,000 million
2015: SanDisk by Western Digital, $16,000 million
2005: Veritas by Symantec, $11,000 million
2011: Autonomy by HP, $10,300 million
1998: Digital Equipment by Compaq, $9,600 million
2015: Veritas (Symantec) by The Carlyle Group and GIC, $7,400 million
2009: Sun by Oracle, $7,400 million
2013: LSI by Avago Technologies, $6.600 million
2016: Brocade by Broadcom, $5,900 million
2011: Hitachi GST by WD, $4,800 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
2014: Riverbed by Thoma Bravo, $3,500 million
2008: Foundry Networks by Brocade, $2,600 million
2012: Elpida by Micron Technology, $2,500 million
2012: Quest Software by Dell, $2,400 million
2010: 3par by HP, $2,350 million
2015: PMC-Sierra by Microsemi, $2,300 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
2003: Documentum by EMC, $1,700
2016: Dell EMC Enterprise Content Division by OpenText, $1,620
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
2015: Virtustream by EMC, $1,200 million
1999: Data General by EMC, $1,100 million
2014: Fusion-io by SanDisk, $1,100 million
1995: Conner Peripherals by Seagate, $1,040 million
2016: QLogic by Cavium, $1,000
(Source: StorageNewsletter.com)

In conclusion, there was not an intense activity in 2016  in number of deals but some of them represented big sum. Why so few? Some interesting start-ups could be acquired but they apparently are asking for high price and prefer to wait for eventually more lucrative IPO. There were recently two rumors not at all confirmed: HPE to acquire SimpliVity, and Huawei to buy HPE, that could be an enormous deal.

For the 14 operations with price being known in 2016, total is $11 billion and average per deal is $754 million, far from an historical record of $92.3 billion and $6.2 billion respectively the former year.

Consequently, the average price per M&A since 1998 has increased from $409 million to $718 million.

We are not far to reach a global $300 billion spent in M&As into storage once more since 1998.

EMC was historically and finally the most voracious in the industry with 81 acquisitions since 1994. It acquired a record of 23 companies in 2006 and 2007 only, just one in 2011, three in 2012 and 2013, five in 2014, three in 2015 and no one last year. On its side acquirer Dell got a total of 18 companies.

With these 81 deals, EMC is largely in front of Seagate (including Seagate Software) with a total of  31 acquisitions, J2 Global 31, Iron Mountain 29, LSI with Avago and Broadcom 26, Veritas added to Symantec 25, IBM 21, WD 21, Dell 18, Xyratex (acquired by Seagate) 16, HP with HPE 16 , and NetApp 16.

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

Year Number of acquisitions Total amount* Average price*
1998 25 13,119 525
1999 22 3,062 139
2000 38 14,021 329
2001 27 28,279 1,047
2002 21 3,101 148
2003 30 5,503 183
2004 26 4,781 184
2005 42 18,690 445
2006 53 17,366 328
2007 34 7,123 210
2008 28 5,726 205
2009 19 10,431 549
2010 25 10,582 423
2011 29 20,544 708
2012 16 7,061 441
2013 21 10,470 499
2014 17 6,173 363
2015 15 92,342 6,156
2016 14 10,554 754
TOTAL 502 288,928 718

* in $ million
(Source: StorageNewsletter.com)

The consolidation in the industry will continue, but at a slow pace, because some publicly-traded companies are in bad shape and there are too many storage start-ups trying to survive with only two goals: to be acquired or die.

Furthermore a trend is not going to stop: storage giants invent about nothing in new killing storage technologies and prefer to get them by acquiring start-ups. It's less expansive than investing in their own R&D.

We will probably continue to see several M&As in the most demanding storage sectors: cloud market, software, hyperconverged system and SSD where there are too many companies, but also in the channel for consolidation.

WHO BOUGHT WHOM IN 2016

MONTH BUYER ACQUISITON PRICE in $ MILLION ACTIVITY OF ACQUIRED COMPANY
11 Broadcom Brocade 5,900 FC and Ethernet connectivity products
6 Cavium QLogic 1,000 Networking and storage connectivity
5 Clearlake Capital Group Vision Solutions NA Provider of HA, DR, and migration software and services; acquired from Thoma Bravo
2 Datacastle Evault (assets) NA Endpoint protection
2 DataLocker IronKey assets (Imation) NA Enterprise Management Services (enterprise encryption)
10 DCC Hammer 47 Distributor of server and storage solutions to resellers in UK and Continental Europe
8 Defenx PLC Memopal 2 Italian online backup provider
12 Docker Infinit NA French start-up in file transfer
6 eFolder Replibit NA Backup and disaster software for MSPs
3 ETI-NET Crossroads (assets) NA Virtual Tape System and Sphinx products
2 Hewlett-Packard Enterprise Trilead NA Swiss firm in backup for VMware and Hyper-V
8 HPE SGI 275 HPC
10 IBM Sanovi Technologies NA Indian company in hybrid cloud recovery, cloud migration and BC software for enterprise and cloud infrastructure
11 Insight Enterprises Datalink 258 IT services and enterprise data center solutions
3 j2 Global VaultLogix NA Online backup
3 j2 Global Yotta280 NA Online backup
3 j2 Global Global Data Vault (assets) NA Online backup
1 j2 Global On Demand Recovery NA Online backup in UK
3 j2 Global Backup Solutions (assets) NA Online backup
6 j2 Global Electronic Vaulting Services NA Backup and DR built on Asigra
6 j2 Global Safebackup NA Backup service for SMBs
10 j2 Global FrontSafe NA Online backup in Denmark
10 j2 Global DataProtect NA Online backup in Ireland
10 j2 Global Dakota Backup NA Online backup in USA
6 J2 Global 24sevenbackup NA Online backup in Ireland
2 KeepItSafe (J2 Global company) InterCloud Systems(assets) 26.1 Online backup
2 Kingston IronKey asssets (Imation) NA Encrypted flash key solutions
10 LDiscovery Kroll Ontrack 410 Services and solutions to help manage, recover, search, analyze, produce and present data
3 Load Dynamix Virtual Instruments NA Merger between the two companies in performance analytics
2 Mellanox EZchip 811 High-performance processing solutions for carrier and data center networks
8 Nutanix PernixData 10 Scale-out data acceleration and analytics; price according to Forbes
8 Nutanix Calm.io NA DevOps automation
7 One Stop Systems Magma NA Both firms in PCIe expansion technology used to create high-end compute accelerators and flash storage arrays
9 OpenText Dell EMC Enterprise Content Division 1620 Including Documentum, InfoArchive and Leap
1 Pivot3 NexGen Storage NA Hybrid storage appliances, dynamic all-flash arrays and QoS capabilities
1 Proact IT Compose IT System 6.4 Cloud service
5 Rigby Private Equity Zycko NA Storage VAD in 12 countries in EMEA
3 Sage Microelectronics Initio NA SSD controllers
6 Samsung Joyent NA Public and private cloud provider
3 StrongBox Data Solutions Crossroads Systems (assets) 1.85 Crossroads' entire product portfolio and maintenance business
11 SUSE it-novum assets NA openATTIC storage management
1 TA Associates StorageCraft Technology 187 Private equity firm to acquired provider of backup and recovery software
8 Trusted Data Solutions Altirium NA Data recovery and tape restoration in UK
2 Trusted Data Solutions Data Recovery Systems NA RAID, HDD and tape recovery
6 Underground Vaults and Storage, Inc. Concergent IT NA Especially distributor of Dell storage
4 V&G Information System RunCore NA SSD maker
11 Virtual Instruments Xangati NA Hybrid cloud and virtualization performance management

  (Source: StorageNewsletter.com)

 

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