In enterprise M&A in 2021, there was a lot of activity — my top ten acquisitions totalled just about $121 billion. In addition, while I was writing this, the largest corporate acquisition of the year — Oracle has bid to purchase Cerner — occurred. The final count excludes what would have been the third-largest transaction when Zoom agreed to purchase Five9 for $14.7 billion last summer. When Zoom’s global stock price bubble popped, the arrangement fell apart, and the firms chose to go their own ways.
Meanwhile, Microsoft’s proposal to purchase Nuance Communications, the second-largest transaction, caught in regulatory limbo in the United Kingdom, with authorities concerned that it would give Microsoft too much influence in the healthcare industry. Given that Visa’s $5.3 billion acquisition of Plaid halted last year when US authorities attempted to prevent the deal and the parties finally opted to walk away, the U.K. decision is worth keeping an eye on.
Last year’s total was a whopping $165 billion, although it was boosted by four large-chip consolidation deals worth more than $100 billion. This year’s deals are significantly more diversified, with more than 20 transactions worth more than $1 billion and many more that did not make the cut. The bottom three deals in 2019 were all under $2 billion; the smallest transaction this year was $5.4 billion.
It is also worth noting that private equity companies were engaged in four of the ten transactions, indicating that they are still quite active in the M&A market. This year, there was a lot of emphasis on legacy security firms. I had to select, like in past years, which offers deserved on my list and did not, which is never simple. Because they both featured consumer-focused firms, I did not include many major mergers, such as the $29 billion Square-Afterpay merger and the $14 billion McAfee transaction.
I also left out a few of other large corporations that are not in my coverage region. These included the $9.6 billion Hitachi-Global Logic agreement and the $7.1 billion Panasonic-Blue Yonder merger. The $5.3 billion KKR-Cloudera merger and the $4.5 billion Cisco-Acacia agreement both almost missed out on the list. Clearlake purchased Quest Software from Francisco Partners for a reported $5.4 billion, marking the start of a run of private equity firms buying older security companies.
Quest, whose products include One Identity and OneLogin, has shifted around over the years, but it still runs a profitable business, and Francisco made a nice profit on its $2 billion investment in 2016. Permira, a private equity firm, made a bet on email security earlier this month when it paid $5.8 billion for London-based Mimecast. Mimecast had a significant existing market with over 40,000 subscribers, half of whom used Microsoft Office 365 products, which Permira appreciated.