With behemoth deals like Microsoft’s acquisition of GitHub for $7.5 billion and Recruit Holdings’ $1.2 billion acquisition of Glassdoor, 2018 has already become a banner year for venture-backed mergers and acquisitions transactions. The Microsoft-GitHub deal is one of the largest acquisitions of a private, U.S. venture-backed company, outspent only by Facebook’s $19 billion acquisition of freeware and cross-platform messaging service WhatsApp in 2014. But since the latter acquisition, relations have turned sour between Facebook and WhatsApp, with the founders of the messaging platform butting heads (and parting ways) with Facebook founder and CEO, Mark Zuckerberg. Still, the acquisition’s price tag remains a milestone in the world of M&A.
The Largest 2018 Acquisitions of Venture-Backed Companies
There has been no shortage of M&A news in 2018. But a few acquisitions have stood out among the rest—namely because of their dollar figure and high-profile acquirers:
- Roche acquired medical software provider Flatiron Health for $1.9 Billion
- Impact Biomedicines, a cancer drug developer, was acquired by Celgene for $1.2 billion
- Amazon acquired video-connected doorbell company Ring for $1 billion
- ThreatMetrix, a cybersecurity and authentication tech company, was acquired by the RELX Group for $917 million
Another major deal was PayPal’s acquisition of Swedish fintech startup iZettle. In its largest acquisition to date, PayPal will purchase the then-soon-to-be-public Swedish payment company for $2.2 billion. iZettle CEO Jacob de Greer expects the company will eclipse $6 billion in payments in 2018 with a gross revenue of $165 million.
Fewer (But Bigger) M&A Deals
With acquirers having spent north of $20 billion in 2018, public M&A deals have already reached 80% of 2017’s annual figures—and this is only the disclosed deals. Crunchbase reports that if undisclosed prices of M&A transactions were made public, the numbers would be much, much higher; fewer than 20% of acquisitions were reported with prices attached.
So far, 2018 has shown that total acquisitions are on par with deals made at this point last year. Deals are projected to continue on this trajectory, signaling no great increase between last and this year. But what is different is that large acquirers are willing to spend more on fewer deals. 2017 showed only one software acquisition that exceeded $1 billion, and only one other that was north of $1 billion. If the first half of 2018 is any indicator, we may expect to see larger acquisitions of startups and smaller businesses by industry giants.
Hiring Solutions Can Help the Mergers & Acquisitions Process
Whether you’re entertaining the option of pursuing a buyout or have your eyes set on distant shores, growing with the right partner is key. Velocity Global’s International PEO (Professional Employer Organization) has helped hundreds of companies quickly and compliantly hire and onboard new employees that are the result of M&A deals. This solution supports companies pursuing expansion on their own terms and widens their global footprint. Ready to scale up your operations overseas? Reach out Velocity Global and make your first move.