M&A Activity in the ICT Sector – September 09

Now we look back, we see that there were a number of notable transactions. Firstly, eBay offloading 65% of Skype to an investor group led by Silver Lake, thereby valuing the business at $2.75bn. eBay acquired Skype in 2005 for over $3bn but evidently found that the synergies with its core business were not sufficient. Staying with telecoms, September then saw Avaya picking up Nortel Networks‘ enterprise units for $915m. It had made a ‘stalking horse’ offer back in July for $475m.

Yet again there was activity in the social networking (SN) space with MySpace acquiring iLike for a reported $20m. iLike is a music application specialist – and, significantly, the most popular one on MySpace’s arch rival, Facebook. Clearly MySpace is trying to regain ground on its rival after losing the number one spot in the SN space. SN via mobile devices is also seen as an area offering significant opportunities and September saw Myriad Group (who have software in over 2 billion phones) acquiring the technology and staff of mobile SN specialists, Xumii.

We are also seeing corporate applications developers increasingly embracing SN functionality – an example being RightNow’s acquisition of enterprise class social platform provider HiveLive for $6m. After some initial scepticism of how SN should be utilised by corporates, it is now clear that there is considerable demand for such functionality.

Last month also saw a sizeable offer ($106.5m) from Google for On2 Technologies, though not, it has to be said, to the delight of all On2 shareholders – some of whom felt the offer undervalues their stock. On2 are video compression specialists and Google clearly see value to their YouTube operation.

In the cloud space, we saw VMware acquire SpringSource (online application management specialist) for $363m and EMC was at it again with their acquisition of FastScale Technology (provider of software platforms to support private cloud infrastructures).

If you want to know what success smells like, then perhaps it’s minty. Mint, a Californian company which only launched its product in 2007, has sold to Intuit – best known for Quicken, QuickBooks and TurboTax – for $170m. Mint provides a free, online personal money management system and had raised $31.8m in VC funding since inception.

Back in the UK there have been some interesting, though perhaps lower profile, transactions including T-Plan’s acquisition of VNCRobot (test automation software) and Onyx Group’s purchase of Moffat Communications (specialist IT services to hedge funds – formerly owned by Grant Thornton UK LLP). Perhaps particularly worthy of note was Kofax plc’s (UK based provider of document driven business process automation solutions) acquisition of US based financial process automation specialist, 170 Systems for $32.9m.

Finally, and fairly hot off the press, we read that Adobe, following some below par results, are to diversify into online optimisation and web analytics with a whopping $1.8bn acquisition of Omniture (valuing it at 18 x EBITDA forecast for 2010).