Silicon Valley deals are back
Deal-making is back in style in Silicon Valley. Driven by powerful trends in mobile devices, digital media and “cloud computing,” tech companies are acting on the urge to merge — a sign, many say, of an improving economy.
SAP’s pending $5.8 billion purchase of Sybase and Hewlett-Packard’s pending $1.2 billion takeover of Palm are the latest headliners among 255 mergers and acquisitions (M&A) with a total value of $17.1 billion that have involved Bay Area companies so far this year.
That’s a big improvement over the same period last year, when there were 192 deals in the region with a value of $12.9 billion.
“We see this as a return to a more normal pattern of deal-making,” said Rob Fisher, a leader of M&A operation of the accounting firm PricewaterhouseCoopers. The stock market, while recently shaken by Greece’s financial crisis, has strengthened over the past year, unleashing pent-up demand for mergers and acquisitions, Fisher said.
For the shrinking venture capital industry, the surge is providing welcome return on investments at a time when the recovery in initial public stock offerings (IPOs) remains spotty.
“We’re seeing more companies go public, but the M&A activity outpaces the IPOs,” said Promod Haque, managing director of Norwest Venture Partners.
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