Biggest technology acquisitions of 2020

We round up the biggest technology industry mergers and acquisitions of the year so far

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Last year marked a slight decrease in global technology M&A activity from the blockbuster year that was 2018 – when SAP bought Qualtrics for $8 billion, IBM acquired Red Hat for a staggering $33 billion and Broadcom picked up CA Technologies for $18.9 billion in cash.

As of the end of Q3 2019, technology M&A deals worth $245 billion had been announced globally, marking a decrease of 25% year-on-year according to GlobalData.

Which mergers and acquisitions does 2020 have in store? If January alone is anything to go by, there will be no slowing of major deals across the industry, with security already proving to be a hot area.

Here are the biggest technology acqusitions of 2020 so far, in reverse chronological order:

14 December: Vista Equity Partners buys Pluralsight for $3.5B

Private equity firm Vista Equity Partners has agreed to buy the Utah-based training software specialist Pluralsight for $3.5 billion in cash, a small premium on its market cap at the time of the sale of $2.94 billion.

[Also on Computerworld: Utah's four SaaS unicorns come of age]

Founded in 2004, Pluralsight provides online training software-as-a-service (SaaS) that allows  companies to offer employees bespoke training courses, or individual contributors to sign up to hone their IT skills. The enterprise version of the platform also comes with analytics, allowing HR and IT leaders to see where they have skills gaps and to identify training requirements for tech staffers. Pluralsight went public on the Nasdaq in 2018, seeing its stock price dip during the pandemic this year before rebounding to its IPO price this month.

“Today’s announcement is an exciting milestone for Pluralsight as we begin the next phase of our evolution,” Aaron Skonnard, cofounder and CEO of Pluralsight, said in a statement. “Through this partnership with Vista, we will be able to move faster and be more agile, accelerate our strategic vision and, ultimately, deliver deeper, more powerful solutions that help companies adapt and thrive in the digital age. We are relentlessly focused on helping enterprises improve and optimize their technology workforce and providing the most effective path to skills transformation for their technology teams."

Vista focuses on investments in enterprise software companies and also counts the likes of Apptio, Datto and Jamf in its portfolio.

1 December: Salesforce to acquire Slack for $27.7B

Salesforce saved the biggest software acquisition of the year (so far) until last, snapping up the popular workplace communication company Slack for $27.7 billion in stock and cash.

The deal brings together two software-as-a-service (SaaS) giants, with Slack seeing explosive growth since its founding in 2009. It also marks the biggest acquisition of Salesforce founder and CEO Marc Benioff's career, blowing the $15.3 billion deal for data visualisation specialist Tableau last year out of the water. For context, the final price is more than Microsoft paid for LinkedIn ($26.2 billion) in 2016 and is only topped by IBM’s $34 billion purchase of Red Hat in 2018.

“This is a match made in heaven," Benioff said in a statement. "Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes."

[Also on Computerworld: Why a Slack acquisition would make sense for Salesforce]

Despite its popularity, Slack hasn't fared particularly well since it went public in June 2019 via a direct listing. Fierce competition from Microsoft Teams and videoconferencing tools such as Zoom, combined with continued struggles with profitability, has pushed the company's stock price down by as much as 40% over that period.

The SaaS company expects to make close to $850 million in revenue for the 2021 financial year, but is still running at a loss despite having 130,000 paying users at last count. In Salesforce, it joins a company that recently passed an annualized run rate of $17 billion. Slack cofounder and CEO Stewart Butterfield will continue to lead the company after the deal closes.

30 November: Facebook acquires Kustomer for $1B

Facebook announced that it is acquiring New York-based startup Kustomer in November, for a reported $1 billion.

Founded in 2015, Kustomer has built an omnichannel customer relationship management (CRM) platform, specifically focused on the contact center. Facebook is increasingly keen to connect customers of its Messenger, WhatsApp and Instagram services with businesses and is fully aware of the need for businesses to seamlessly talk to their customers across a broad variety of digital channels.

"Facebook plans to support Kustomer’s operations by providing the resources it needs to scale its business, improve and innovate its product offering, and delight its customers," Dan Levy, Vice President of Ads and Business Products, and Matt Idema, COO, WhatsApp, wrote in a joint statement. "That way, more people will benefit from customer service that is faster, richer and available whenever and however they need it, whether it’s phone, email, web chat or messaging."

10 November: Adobe to acquire Workfront for $1.5B

Adobe announced the acquisition of project management tool Workfront for $1.5 billion at the start of November.

Utah-based Workfront is a task management and collaboration tool that operates in a highly competitive space alongside the likes of Microsoft Project and Planner, Wrike, Asana, Smartsheet, Liquid Planner, monday.com, Jira, Trello and Clarizen. Unlike those firms, it focuses on specifically helping marketing professionals get their work done, aligning well with Adobe —  specifically its Experience Cloud product.

Workfront counted 3,000 customers and 1 million users at the time of the acquisition, including a number of shared customers with Adobe, such as Deloitte, Under Armour, Nordstrom, Prudential Financial, T-Mobile, and The Home Depot.

“Adobe and Workfront share a common affinity to help the modern marketer thrive in an ever-evolving, increasingly demanding setting,” Workfront CEO Alex Shootman – who will remain in the role – said in a statement. “We’re excited to join Adobe and believe this will be a tremendous opportunity for our customers and partners.”

29 October: Marvell Technology to acquire Inphi for $10B

The semiconductor market continued to consolidate at a rapid pace toward the end of 2020, when Marvell Technology announced that it will acquire Inphi in a $10 billion cash-and-stock deal. This followed AMD's purchase of Xilinx earlier in October and Nvidia buying Arm in September, marking a major shake-up of the industry.

The two California-based firms will combine to form a chip company worth around $40 billion and plan to focus on building high-performance chips for data centers and 5G wireless infrastructure.

Inphi specializes in optical-networking chips, which are most commonly used in cloud data centers and by telcos to power their 5G networking infrastructure. Marvell has historically been strong in similar areas, making the acquisition highly complementary.

“Marvell and Inphi share a vision to enable the world’s data infrastructure and we have both transformed our respective businesses to benefit from the strong secular growth expected in the cloud data center and 5G wireless markets” Ford Tamer, president and CEO of Inphi said as part of the announcement. “Combining with Marvell significantly increases our scale, accelerates our access to the next generations of process technology, and opens up new opportunities in 5G connectivity.”

27 October: AMD to acquire Xilinx for $35B

Merger-and-acquisition activity in the semiconductor market continued to boom in late October  when AMD announced it would acquire Xilinx in a $35 billion all-stock deal.

Xilinx specializes in programmable processors aimed at high-performance use cases like video file compression and digital encryption, and will help AMD compete with Intel in data centers. Both US firms also outsource the manufacturing of their chips, primarily to Taiwan, and use modular design principles, so there are immediate synergies to be seen in the deal.

“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” AMD President and CEO Lisa Su said in a statement.

“The Xilinx team is one of the strongest in the industry and we are thrilled to welcome them to the AMD family. By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent and scale to define the future of high performance computing.”

Xilinx CEO Victor Peng will take the role of president, responsible for the Xilinx business and strategic growth initiatives when the companies are combined in 2021.

12 October: Twilio to acquire Segment for $3.2B

Cloud communications specialist Twilio made a splashy acquisition in October, picking up customer data platform Segment for $3.2 billion in an all-stock deal.

Both San Francisco-based companies specialize in application programming interfaces (APIs) that  make collecting and consolidating customer data (Segment) and communicating via digital channels (Twilio) easier than building this functionality from scratch.

“Data silos destroy great customer experiences,” Jeff Lawson, co-founder and CEO of Twilio, said in a statement. “Segment lets developers and companies break down those silos and build a complete picture of their customer. Combined with Twilio's Customer Engagement Platform, we can create more personalized, timely and impactful engagement across customer service, marketing, analytics, product and sales.”

Twilio hopes that by bringing Segment's rich customer data together with its variety of engagement channels it can enable something close to personalized customer outreach at scale — the modern day holy grail for many marketeers.

13 September: Nvidia to acquire Arm for $40B

Chipmaker Nvidia confirmed the planned acquisition of UK-based chip designer Arm in September for $40 billion in a combined stock-and-cash deal. The purchase sees the Japanese telco Softbank part with an asset it only acquired in 2016.

“Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. Uniting NVIDIA’s AI computing capabilities with the vast ecosystem of Arm’s CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe," Jensen Huang, founder and CEO of NVIDIA said in a statement.

Based in Cambridge, England, Arm designs chips for companies such as Nvidia and its rivals to manufacture. "As part of NVIDIA, Arm will continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success, with 180 billion chips shipped to-date by its licensees," the company said.

In terms of Nvidia's commitment to the UK, it outlined in the announcement that “Arm will remain headquartered in Cambridge," and the company will continue to "attract researchers and scientists from the UK and around the world."

"I thought that Arm was the best tech company to come out of the UK in the last 50 years. I thought that its original sale to Softbank in 2016 for $32 billion was a mistake and should have been stopped by HMGovt at that time. I thought allowing Softbank to offload to Nvidia was an even bigger mistake on so many fronts," analyst Richard Holway at TechMarketView said.

8 September: Progress Software acquires Chef for $220M

In September, Progress Software announced it was acquiring the infrastructure-as-code pioneer Chef for $220 million in cash.

“This acquisition perfectly aligns with our growth strategy and meets the requirements that we’ve previously laid out: a strong recurring revenue model, technology that complements our business, a loyal customer base and the ability to leverage our operating model and infrastructure to run the business more efficiently,” CEO Yogesh Gupta said in a statement.

“Chef and Progress share a vision for the future of DevSecOps and Progress will provide the scale to further drive Chef’s platform forward and deliver additional value to our customers,” said Chef CEO Barry Crist.

The price tag shows that Chef has had a hard time maintaining its early momentum in the highly competitive open source DevOps tooling space. When it last raised funding in 2015 the company was valued at $360 million.

13 July: HPE picks up Silver Peak for $925 million

Hewlett Packard Enterprise made a big commitment to the SD-WAN (software-defined networking in a wide area network) market in July when it announced its intention to buy Silver Peak for $925 million.

Founded in 2004, Silver Peak specialises in WAN technology and will join HPE's networking brand Aruba.

"Our Unity EdgeConnect SD-WAN edge platform is highly complementary to HPE's industry-defining SD-Branch offerings and it will become the centerpiece of Aruba's WAN edge strategy," Silver Peak CEO David Hughes wrote in a blog post. "Upon closing the deal, we will become part of HPE's Aruba division, bringing together the industry's most comprehensive end-to-end secure networking portfolio from the data centre to the campus, to branch and remote worker locations."

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