IoT, AI and autonomous vehicles help spur tech M&A economy, says new report

Mergers and acquisitions (M&A) for the Internet of Things (IoT) continue to go at a steady pace, according to the latest analysis from Hampleton Partners.

In total, 239 ‘assets’ have been acquired from a total of 198 buyers between 2015 and the first half of this year in the IoT space. The total number of deals made in the first half of this year approached 50, albeit not quite at the same level of 2015, where the first six months of that year pushed 60.

According to Hampleton, the top acquirers were Verizon, ARM, and Intel. The latter recently concluded its $15.3 billion (£11.9bn) deal for Mobileye to help move forward in autonomous cars, while ARM made five acquisitions before itself being bought for $32bn by SoftBank. Verizon made a total of five acquisitions, including Sensity Systems and LQD WiFi.

This search for connected and autonomous car technology was one of the five trends in M&A for IoT, argues Hampleton. “The Mobileye transaction has drawn attention to the fact that Intel, a business better known for PC processors, is setting its [sights] on the next frontier in the auto tech industry in a big way,” the report noted. “For a company that has only been serious about autonomous vehicles for less than 12 months, Intel has made significant headway in the space.”

Mobility was a key dealmaker, with the Hampleton report even putting cars alongside smartwatches and virtual reality equipment as ‘increasingly a central theme within IoT strategies’. “This has largely been exacerbated by the onset of BYOD policies in corporate IT which brings with it a host of new devices to the workplace environment,” said the report.

Consequently, emerging technology will move the needle in future quarters, the analysts added. “Overall, our research shows that technology M&A cooled down in the first half of 2017,” said Miro Parizek, Hampleton principal partner. “However, it is critical to be more nuanced and to look deeper into specific sectors and the related data when assessing deal activity and planning strategy.

“M&A and funding is accelerating in select sectors, as more ‘non-technology’ or traditional companies and private equity firms move to acquire and invest in technology and innovation,” Parizek added. “Artificial intelligence, augmented [and] virtual reality, and cybersecurity are three of the most promising sectors for technology M&A right now.”

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