All M&As in 2016

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

(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

(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)

* 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

  (Source: StorageNewsletter.com)