Internet of Things M&A skyrockets

Mergers and acquisitions related to the Internet of Things (IoT) have skyrocketed this year with $14.8 billion being spent by buyers to purchase 39 companies, according to 451 Research.

The figures were derived from 451 Research’s M&A KnowledgeBase, which is a database of more than 41,000 technology merger and acquisition transactions across 650 industries.

The results show a large increase in spending from 2014, which was itself a record-breaking year, where $14.3 billion was spent in order to buy 62 IoT related companies. This amount is almost eight times the total that was spent by acquirers in 2012 and 2013 combined.

IoT provides the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Software specialists ARM, Intel and NXP each announced two or more deals driven by the high position that acquiring an IoT-related company would give them.

The largest deal of Quarter 1 2015 was NXP’s $11.8bn acquisition of Freescale Semiconductor, an American multinational corporation with headquarters in Austin, Texas. This company was acquired in order to focus its scale and reach on key IoT growth markets led by connected cars, which are cars that have Internet access. Other acquirers announcing acquisitions in 2015 included Amazon, PTC and British Gas.

Brian Partridge, vice president of the 451 Research mobility team stated that even though IoT is just starting to make an impact, spending on IoT related companies will increase in vast amounts over the next few years.

While the Internet of Things is still in its infancy in terms of industry adoption, the deal-making accelerates unabated, and we see no end in sight. The IT service and infrastructure leaders of the future will require broad and deep competencies in IoT, and those bets are being made now. The 2015 numbers left little time to even question our prediction that market forces would accelerate deal activity beyond 2014,” Partridge said.


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