Tech deal of the year: And the winner is...
November 11, 2016
Earlier this week I was lucky enough to host a table of my clients at the UK Tech Awards last night. These awards celebrate success, reward achievement and help to raise the profile of the UK technology (tech) community.
Being tech sector leader for PwC’s Transaction Services team, one of the awards is particularly close to my heart - Tech deal of the year.
This award celebrates a significant commercial or corporate transaction. This transaction could include licensing, partnering, collaboration or acquisition of a company or IP. The deal is usually significant in scope and transformational in nature and would have added significantly to the company’s or organisation’s prospects in the short, medium and long term.
...and the winner is….
Well, this year, the results didn’t disappoint. Well done Micro Focus International on winning this award based on your planned acquisition of Hewlett Packard Enterprise’s software division in a deal worth around $8.8 billion.
Micro Focus is a UK based global enterprise software company with a strong track record of mergers & acquisitions (M&A) and/or integration. It helps customers innovate faster with lower risk. Founded in 1976, it has revenues of around $4.5 billion and employs over 4,500 people.
So why does this deal in particular ‘stand out’? To my mind there are a number of reasons why Micro Focus won deal of the year:
- Timing - With Arm having been sold to SoftBank for £24.3bn earlier in 2016, tech had lost it’s status somewhat in the FTSE 100. The timing of this deal puts tech back on the main stage.
- Contra flow - Most of the deal flow of late has been US companies or investors buying up UK tech assets. This deal goes some way to restoring equilibrium.
- Opportunistic - This is an opportunistic deal. The vendor is realising less than half as much value as its predecessor company spent on pulling together the software portfolio that it is now divesting.
- Up scaling - The deal is a relatively low-risk way for Micro Focus to scale up rapidly.
- Strategically aligned - The acquisition exemplifies Micro Focus’s existing strategy of buying and consolidating mature software businesses. Recent examples include having acquired and successfully integrated Serena, Attachmate and Borland, as well as assets from Progress Software and Compuware.
- And a whole host of other reasons - including the fact that it creates one of the world’s largest pure-play infrastructure software companies with a truly global footprint, agility and financial strength to drive software innovation across both traditional and emerging IT market segments.
So it’s congratulations to Micro Focus and commiserations to the other 11 shortlisted and, no doubt, worthy deals which included a number of other software companies and IT consulting & services organisations.
If you’d like to discuss anything I’ve covered here please do get in touch.