Already in 2021, there’s been a number of tech acquisitions that have surpassed $1 billion. Credit: MJ Graphics / Shutterstock
It’s the dream of many a startup; get so good at what you do a big company wants to buy you out.
Although some founders want to stay in control for the whole journey, others are happy to sell and see the company grow in new hands – either right there with it, or not.
With the growth in tech companies over the last decade, mergers and acquisitions (M&As) in the industry have been some of the most valuable we’ve seen. Despite the pandemic, the tech sector still saw blockbuster deals in 2020 – notably Salesforce’s $27.7 billion price tag for Slack and AMD’s $35 billion payment for Xilinx – on top of a growth in annual value. Globally, tech M&A deals totaled $634 billion 2020, a 91.8% year-over-year increase, according to GlobalData.
With organizations needing to quickly find technology solutions to support pandemic-induced changes, many tech companies have tapped into demand and grown and expanded services.
And research indicates the trend of M&A growth was likely to continue through this year. Already in 2021, there’s been a number of tech acquisitions that have surpassed $1 billion.
Although it's often dollar figures that demand the headlines, acquisitions have a significant impact on employees, company culture and vision. Inevitably, there is change and often that is reflected in staffing. In some occasions, executives choose to take payouts and move on to greener pastures. Others try to make the new roles work, but find after time they just don’t.
Intel, for example, has had some notable departures after acquiring other companies, including Dan McNamara who came through Altera, Naveen Rao who left after Intel wound down development of his Nervana network and recently Craig Barrett, who left less than a year after the company acquired Barefoot Networks.
And of course there’s Stewart Butterfield, who left Yahoo due to issues with the corporate culture before founding Slack, which he has now sold Slack to Salesforce for $27.7 billion. He said the recent acquisition was “the most strategic combination in the history of software,” and he planned to stay on at Salesforce and run Slack as its own division. One of the main reasons numbers dominate the headlines in M&A news is because more often than not few other details are made public in initial announcements.
It can take more than a year for a merger or acquisition to be finalized and for details to be hammered out, and even longer to see the full effects of who stays and who goes.
The Org took a look at the some of the biggest tech M&As over the six months to see what hints were given about executive movements
Microsoft acquires Nuance
Microsoft will use Nuance to crack into the healthcare market, with Nuance already producing the technology of choice for healthcare professionals to do paperwork with their voices.
Signs are good for Nuance staff, with LinkedIn co-founder Reid Hoffman telling CNBC in regards to the Nuance acquisition that one of the things he learned through Microsoft’s acquisition was, “how good Satya and his team are at actually integrating companies, both operationally and culturally." LinkedIn CEO Jeff Weiner stayed with the company after its 2016 acquisition until February 2020, when he announced he was stepping down to become the executive chairman of the company.
Nuance CEO Mark Benjamin said to seize on Nuance’s growth, it needed the right platform to bring focus and global scale to customers and partners “to enable more personal, affordable and effective connections to people and care.”
“The path forward is clearly with Microsoft — who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference.”
Wipro acquires Ampion
In April, Wipro announced it had acquired Australia-based cyber security providing company Ampion for $117 million. The companies said their combined offerings, powered by engineering transformation, DevOps and security consulting services would bring scale and market agility to respond to the growing demands of customers. So far, both companies have pointed to efforts to maintain the companies’ workforces and expand through the region.
Wipro has been in the Australia/New Zealand market for more than two decades and the deal is being seen as strengthening commitments to those markets.
“We believe that Ampion’s experience, talent, capabilities and proven client credentials in ANZ, coupled with Wipro’s global scale, leadership in technology, and a deep understanding of domain and delivery, will make us a truly formidable team,” he said. “We are pleased to become a part of Wipro and look forward to an exciting journey together.”
Servicenow acquires Intellibot
In March, software company ServiceNow acquired Indian robotic process automation company Intellibot for an undisclosed price. The move sees ServiceNow expanding its workflow management platform and its Indian workforce, where it already has its second-largest R&D center. In a good sign for Intellibot staff, the deal will allow ServiceNow to double its headcount in the country over the next three years.
In a press release, the companies said ServiceNow intended to build Intellibot's capabilities natively into the Now Platform to enable customers to more easily integrate with both modern and legacy systems to drive productivity and strengthen existing artificial intelligence (AI) and machine learning (ML) efforts.
Intellibot CTO and co‑founder Srikanth Vemulapalli said the company’s RPA combined with ServiceNow workflows would help businesses better connect disparate systems to accelerate innovation and “thrive in a new world of work.”
Nvidia acquires Arm
In one of the biggest recent acquisitions, semiconductor manufacturer Nvidia is buying British semiconductor company Arm Holdings for $40 billion.
However, Arm Holdings co-founder Hermann Hauser, who is no longer with the company, said the thousands of Arm Holdings staff in the UK could lose their jobs because of the acquisition, sparking fear amongst some employees.
Arm Holdings currently has 6,500 staff.
Despite Hauser’s concerns, Huang said in a letter to employees that the company would stay headquartered in Britain and that he wanted to invest in the country and create more jobs, Reuters reported.
"We want to grow Arm and make it become even greater," he said, adding that Arm will hire more engineers and staff for a new artificial intelligence research center at its Cambridge headquarters.
AMD acquires Xilinx
The companies have said the combination will create the industry’s leading high performance computing company, significantly expanding the breadth of AMD’s product portfolio and customer set across diverse growth markets where Xilinx is an established leader.
AMD said in a press release, it expects to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure and through streamlining common areas. That streamlining could pose job security questions for some staff.
For now, all we know is that AMD CEO Dr. Lisa Su will lead the combined company as CEO and Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives. In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.
Qualcomm acquires NUVIA
In a $1.4 billion deal in March, semiconductor giant Qualcomm acquired CPU manufacturer NUVIA.
NUVIA CEO Gerard Williams, who will now become Qualcomm Technologies SVP of Engineering, said together the companies would invent breakthrough technologies and create a new class of high-performance computing platforms that set the bar for the industry.
Other NUVIA founders Manu Gulati and John Bruno and their employees will join Qualcomm, the companies have said.
“The combination of NUVIA and Qualcomm will bring the industry’s best engineering talent, technology and resources together to create a new class of high-performance computing platforms that set the bar for our industry,” Williams said.
The proof of the pudding
Despite the majority of companies in major M&A deals saying the goal is staff retention, the reality can play out a little differently. Case in point was last year when we saw Uber lay off 185 people from its Postmates division just months after officially acquiring the company. The layoffs accounted for 15 percent of Postmates total staff, including Postmates founder and CEO Bastian Lehmann and the majority of the executive team.
High ranking Postmates staff are said to have left with multimillion dollar exit packages, while some employees who stayed on could see pay cuts and others will face termination at the end of their contracts, the New York Times reports.
Uber spokesperson Matt Kallman said the company was “sorry to say goodbye” Postmates staff leaving the fold. “We are so excited to continue to build on top of the incredible work this remarkable team has already accomplished.”
With the boom in tech M&As post-pandemic, there will no doubt be culture clashes and staffing issues along the way. Competition in the market will speed company growth and development, and, as Deloitte found, companies will need to deploy a range of inorganic growth strategies, like alliances and ecosystem partnerships to stay ahead.
“Deal making itself has to change to reflect the new environmental and societal priorities of the post-crisis world and deliver lasting impact beyond commercial success,” the professional services company said. And for movements within newly merged or acquired companies: we just have to wait and see.
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