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Mergers and Acquisitions in PLM Q1 Update

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With Q1 now behind us, I wanted to take just a minute to make a few observations that update our thoughts on 2014:

1)      Acquisitions in total actually accelerated over the 4 month period from November to March with almost half the total of the prior 12 months, but…

2)      Only three players accounted for the vast majority of these transactions.  Autodesk, Oracle and Dassault Systemes, so while on the surface M&A appears to have picked up speed, the acceleration is in reality more isolated than broad based.

3)      Each of the 3 major acquirers made large investments in new areas of technology for them.  Autodesk made a major move to broaden their portfolio into CAM; Oracle went for marketing applications; and Dassault Systems targeted the hot biotech segment.  Note also that Autodesk, the acquisition leader by number, appears to be placing multiple bets on a variety of technologies across multiple domains.

4)      Mobile, social and cloud based applications continued to be recurring themes, but tools to implement these technologies were noticeable absent vs the prior 12 months.

So to reiterate our previous position, 2014 should be another banner year for M&A.  Major PLM leaders are placing bets on evolving technologies with the notion that one, or more, may be the next wave of the future, often at significant premiums, highlighting the scarcity value of truly unique, differentiated technology and domain expertise.

From the sell side, owners are considering this time as ripe for exit as the economy enters the mature phase of the expansion prior to the inevitable downward turn in the years ahead.   If you see yourself in this position, and are reluctant to ride out the economy for another cycle, it may be worth a discussion on how you can take advantage of the current trends in M&A for PLM.

2014 Update

2014 Update

For more detail on Q1, please see the recently updated M&A in PLM report, and for more information on the specifics of liquidity planning, or of the details behind the material described in this paper, please feel free to give me a call.