siliconindia | | February 20139in2012 witnessed 94 deals in the tech sector with an average value of $717 million. The same year saw 768 M&A deals across all sectors above $100 million as compared to 2011which had 75 tech M&A deals with an average value of $512 million. The report by Towers Watson's M&A high lights some interesting findings especially while looking at the developments in the public markets. Year 2012 saw some IPO slips such as Facebook and other tech stocks such as Zynga and Groupon also slipped in value. The same year also saw Yammer's $1.2 billon exit, as well as Kayak's exit (as a recently public company) to Priceline for $1.8 billion. Yammer was a possible IPO candidate, but founder David Sacks chose to sell the company to Microsoft. Kayak was already a public company (and was performing decently on the public markets) but the Priceline deal was more profitable. Facebook's $1 billion acquisition of Instagram, and Cisco's $1.2 billion purchase of Meraki also stayed in news last year.The high-tech sector, compared to other business markets, is more risky for companies conducting M&A. 2012 saw tech acquirers' returns as -0.6 percentage points relative to the MSCI World Index and -4.9 percentage points relative to the MSCI Industry Index. This compares to say the telecoms sector, where acquirer returns were 9.9 percentage points relative to the MSCI World Index and 11.9 percentage points relative to the MSCI Industry Index.While some tech deals succeed in acquisitions, the report says that performance of buyers in the high-tech sector falls significantly below industry benchmarks and there is little to no shareholder value created. Why these deals don't succeed is another story. The study highlights that the merging of companies of different sizes, development technologies and cultures often gets in the way of a successful integration.2012 saw 94 Tech M&A deals above $100 Million, average deal value $717 Million
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