The Cloud Drives Mid-Market M&A Action

As the power balance in politics shifts and the stock market rises and falls, one consistent trend we continue to see in the U.S. technology sector is M&A.


In the third quarter among the largest deal was Intel’s move to buy McAfee for $7.7 billion, which PricewaterhouseCoopers notes is the largest security deal on record. Other whoppers were Intel’s $1.4 billion purchase of mobile chip outfit Infineon Technologies; HP’s $1.5 billion acquisition of security company ArcSight and $2.3 billion effort to buy data storage firm 3PAR; and IBM’s $1.7 billion buy of Netzza, a data storage company.

PwC, which just released its quarterly M&A update for the sector, notes that while we recently saw the closing of several billion-dollar deals announced in the latter part of Q2, mid-market transactions continue to dominate. The firm expects more of the same in the mid market for the rest of 2010, with action to be prevalent in the areas of data storage, security, virtualization, and other areas related to the cloud.


Indeed, last week alone saw a handful of new action on this front.


Cbeyond contacted me late last week trumpeting the fact that it has acquired two companies MaximumASP and Aretta Communications. The combined transaction value is approximately $40 million.


MaximumASP offers cloud services such as managed virtual servers and dedicated servers. Aretta sells cloud services such as cloud PBXs and SIP trunking. Both target U.S. SMBs.


“The acquisition of MaximumASP and Aretta Communications is an important step forward for Cbeyond’s business,” says Cbeyond CEO Jim Geiger. “We believe these acquisitions will provide significant growth opportunities, leverage our existing channels of distribution, and expand our innovative technology and expertise.”


Last week also saw the combination of hosted VoIP outfits M5 Networks (the acquirer, which it out of New York) and Geckotech (the acquiree, which is based in the Windy City).


"We have built the best delivery system and backoffice in the business and are excited to offer it to another customer base," says Dan Hoffman, president and CEO of M5 Networks.

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This page contains a single entry by Paula Bernier published on November 8, 2010 3:48 PM.

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