It was a funny year in enterprise tech M&A, one in which the majority of activity came from private equity firms: As tech stock values plunged throughout the year, these companies went bargain hunting. They saw companies with lots of upside being vastly undervalued in the brutal market conditions of 2022.
But curiously, the year began with Microsoft announcing it was acquiring Activision Blizzard for a startling $69 billion in January, followed in April by Twitter being sold to Elon Musk for $44 billion. Neither of those deals made this list, however — they aren’t really enterprise companies. But they did show the promise and big money being tossed around this year.
After you discount those transactions, the top two deals still involved companies scooping up desirable properties for big bucks, but much of the top 10 is dominated by those private equity concerns, with Thoma Bravo attached to three of the top 10 and Vista Equity Partners in two. According to Crunchbase, Thoma tallied up six multibillion-dollar deals in 2022 and Vista three. That’s a lot of action for one year.
Consider that Google buying Mandiant for $5.4 billion and Intel nabbing Tower Semiconductor for the same price didn’t even make the list. This year required at least a $6 billion price tag to even make the top 10. That’s up from $5.4 billion last year and $3.5 billion in 2020. This year’s deals totaled $153.9 billion, compared with $121 billion in 2021 and $165 billion in 2020, a year in which a bunch of chip companies changed hands in a period of consolidation for the industry.
We saw a bunch of minor deals — minor in M&A money, that is — as companies scooped up smaller startups. Those deals didn’t make this list but included Celonis buying Process Analytics Factory for $100 million and Snowflake grabbing Streamlit for $800 million. Many other deals were so small that the companies didn’t have to reveal the buying price, like IBM buying Envizi or Zoom acquiring Solvvy.
Private equity could be gearing up to shop for vulnerable tech companies
A couple of large deals died on the vine this year, with Nvidia walking away from its $40 billion offer to buy Arm after it came under intense regulatory scrutiny. In addition, Zendesk scrapped its attempt to buy Momentive, the company behind SurveyMonkey, for $4.1 billion after investors rejected the deal. Eventually, Zendesk would get acquired and make our list.
Several deals in this list are facing intense regulatory scrutiny, including the top two, so it remains to be seen if all of these deals will make it to the finish line or join Nvidia in choosing to avoid the cost of fighting a government entity, whether in the U.S., the U.K. or the EU. That could be the real M&A legacy of 2022, but time will tell.
Without further ado, here are 2022’s top 10 enterprise M&A deals:
10. OpenText acquires Micro Focus for $6B
Not a huge deal in the scheme of things — a legacy software company buys a legacy software company — and truthfully, Micro Focus itself has acquired a bunch of legacy titles over the years, including Borland and Novell. It also partnered with HPE in 2016 in an $8 billion deal. As noted about the deal when it was announced, this was less about building out the catalog with a compatible product than it was simply to get bigger. Still, it was good for No. 10 on this year’s list.
9. Kaseya nabs Datto for $6.2 billion
This deal involved bringing together the security technology of Kaseya with the disaster recovery capabilities of Datto, a company that had been around the block. It raised $100 million as a startup before being acquired by Vista Equity in 2017. The private equity firm took it public in 2020 before selling it to Kaseya earlier this year.
8. Thoma Bravo adds Sailpoint for $6.9 billion
Thoma Bravo was busy in 2022, kicking off a year of big identity software spending with the acquisition of identity security company Sailpoint in April. It would later buy a couple of adjacent pieces, including Ping Identity for $2.8 billion in August and ForgeRock for $2.3 billion in October.
7. Thoma Bravo snags Coupa for $8 billion
Coupa is not exactly a household name in enterprise software, but it specializes in spend management, something that every company needs to do. Prior to the sale, activist investors took the unusual move of responding to rumors of a potential sale, believing the company was undervalued and it wasn’t an optimal time to sell. When Thoma Bravo made an offer, however, the board approved the deal. It remains to be seen if the same investors will try to rally others to block it when it comes to a shareholder vote in the new year.
6. Vista Equity acquires Avalara for $8.4 billion
This is another deal involving a lesser-known enterprise software company specializing in tax compliance. It’s not sexy, but it’s surely necessary for finance departments. This deal marked the first for Vista in this year’s top 10, though it’s not the last for the active investment firm.
5. Permira and Hellman & Friedman nab Zendesk for $10.2 billion
In yet another in a string of private equity deals, Permira et al. nabbed Zendesk after a rocky ride for the SaaS help desk company. Zendesk began the year by turning down a $17 billion acquisition offer. It would later try to buy SurveyMonkey, only to be rebuked by investors before agreeing to an acquisition price well below its February offer as SaaS stock prices plunged throughout the year.
4. Thoma Bravo buys Anaplan for $10.7 billion
The third and final Thoma Bravo deal on this list was a doozy: The PE firm grabbed Anaplan, a SaaS planning Excel replacement tool, for almost $11 billion. Like some other companies on this list, Anaplan’s stock price was down considerably at the time of the acquisition, although Thoma paid the peak price over the last six months to seal the deal. It raised almost $300 million before going public in 2018.
3. Vista snatches Citrix for $16.5 billion
Vista acquired remote software company Citrix for $16.5 billion at the end of January in the first major enterprise deal this year. The firm was joined by fellow private equity partner Evergreen Coast Capital (an affiliate of Elliott Investment Management). Citrix launched way back in 1989, and the idea was to combine it with another Vista portfolio company, Tibco.
2. Adobe surprises with $20 billion Figma deal
One thing most of the companies share on this list is that they are legacies — or at least ones that have been around for a long time, have gone public and have dealt with the vagaries of the market. Figma was a startup with a bright future, but Adobe gave it an offer that was hard to refuse: double its most recent private valuation and 50x ARR. This deal faces major regulatory hurdles, however, and it’s still not clear that regulators will allow it to go through. It certainly upset designers, who love the software and viewed Figma as the anti-Adobe — and even a possible Adobe killer.
1. Broadcom goes big with $61 billion bid for VMware
We figured that once Dell spun out VMware in 2021, someone would eventually come calling and try to snatch up the server virtualization company. But we didn’t figure Broadcom as a potential buyer. In the end, it was Broadcom that ponied up the cash to pair VMware with other acquired software in its portfolio, like CA Technologies, which it acquired in 2018 for $19 billion, and the enterprise side of Semantic for $16.9 billion a year later. Like the No. 2 deal in this list, this one is also feeling regulatory heat, although the company told TechCrunch recently it believes it will pass muster and VMware will become part of Broadcom in 2023.
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