There was a lot of action in 2021 in enterprise M&A — once totaled, my top 10 deals came in at just under $121 billion. And the biggest enterprise deal of the year by far — Oracle’s bid to buy Cerner — happened as I was writing this post.
The final tally doesn’t include what would have been the third largest deal when Zoom agreed to buy Five9 last summer for $14.7 billion. That deal eventually broke down, as Zoom’s pandemic stock price bubble burst, and the companies ultimately decided to go their separate ways.
Meanwhile the second-biggest deal, Microsoft’s bid to buy Nuance Communications is stuck in regulatory limbo in the U.K., as regulators worry that it could give Microsoft too much power in the healthcare market. The U.K. decision bears watching, given that Visa’s $5.3 billion acquisition of Plaid was scuttled last year when U.S. authorities sued to block the deal and the parties eventually decided to walk away.
You may recall that last year’s total was an incredible $165 billion, but that was fueled by four large-chip consolidation deals totaling over $100 billion. This year’s deals are far more diverse, with more than 20 deals over $1 billion, and many that didn’t make this list. In 2019, the bottom three were under $2 billion — this year, the smallest deal was $5.4 billion.
It’s also worth noting that four or the 10 deals involved private equity firms, who continue to be highly active in the M&A market. There was a big focus on legacy security companies this year.
As in previous years, I needed to decide which deals belonged on my list and which didn’t, and that’s never easy to do. I didn’t include a number of large deals, including the $29 billion Square-Afterpay merger or the $14 billion McAfee deal, as they both involved consumer-focused businesses.
I also excluded a couple of other big companies that fall outside my coverage area. These included the Hitachi-Global Logic deal for $9.6 billion, and the Panasonic-Blue Yonder deal for $7.1 billion. Two other big deals just missed making the list: the $5.3 billion KKR-Cloudera acquisition and the Cisco-Acacia $4.5 billion deal.
So here are my top 10 deals in ascending order:
10. Clearlake-Quest Software $5.4B
In the first of a string of private equity companies buying older security companies, Clearlake bought Quest Software for a reported $5.4 billion from another private equity firm, Francisco Partners. Quest, whose products include One Identity and OneLogin, has been shuffled around over the years, but it still has a decent business, and Francisco was able to turn a tidy profit on its 2016 $2 billion investment.
9. Permira-Mimecast $5.8B
Speaking of private equity, Permira took a plunge into email security with the acquisition of London-based Mimecast earlier this month for $5.8 billion. Permira liked that Mimecast had a large existing market with almost 40,000 customers, half of who use Microsoft Office 365 products.
8. Ericsson-Vonage $6.2B
Ericsson, an old-school networking company, went shopping for a bit of modernization and decided to pluck cloud communications company Vonage for $6.2 billion just before Thanksgiving. While Vonage was known mostly for its VoIP product, it had expanded into communications APIs in recent years, and all of that tech appealed to Ericsson.
7. Okta-Auth0 6.5B
Okta has grown into the leading cloud identity solution inside organizations, but it wanted to be more than that, so it spent $6.5 billion to buy Auth0, a tool used by developers to embed identity into their programs. Okta saw the investment as a way to cover identity across both corporate and embedded use cases, and it was willing to spend a bushel of money to make that happen.
6. American Tower-CoreSite $10B
There were two big deals involving data centers in the same week in the middle of November. American Tower, a real estate investment trust (REIT), bought the fourth biggest U.S. data center operator, CoreSite, for $10 billion. For all that dough, it got 25 data centers generating $655 million annually.
5. Intuit-Mailchimp $12B
In a somewhat surprising deal, Intuit, best known for its family of financial products, bought email marketing firm Mailchimp for a cool $12 billion. Intuit helps many small businesses with their finances, and the thinking is that it can begin to expand that small biz footprint into things like email marketing, and perhaps over time, even more.
4. Thoma Bravo-Proofpoint $12.3B
Yet another big security deal involved private equity firm Thoma Bravo buying Proofpoint for a hefty $12.3 billion in cash. Like the #9 Mimecast deal, Proofpoint is in the business of protecting email, and it’s apparently a popular target for private equity firms this year.
3. KKR and Global Infrastructure Partners-CyrusOne $15B
The other big data center deal was a doozy with KKR and Global Infrastructure Partners taking the third-largest U.S. data center operator CyrusOne for a hefty $15 billion. This was the largest such deal ever for a private data center in the U.S., according to Synergy Research, and it shows that there is money to made at the bottom of the cloud infrastructure market beyond the big three of Amazon, Microsoft and Google.
2. Microsoft-Nuance Communications $19.7B
Microsoft made a play for the lucrative healthcare market when it announced its intent to buy Nuance Communications for $19.7 billion in April. The deal is facing some headwinds as U.K. regulators are scrutinizing the deal, but EU regulators approved it this week, which could bode well.
1. Oracle-Cerner $28.3 billion
And the biggest deal of the year: Oracle buying EHR firm Cerner for $28 billion, showing that healthcare has the attention of major software companies, and they are willing to put out big bucks for them. The deal could face the same kind of regulatory scrutiny as the Microsoft deal as it proceeds, but it’s the top acquisition for 2021 so far.