Last week’s Red Herring issue (subscription required) had an article discussing a little buying spree that 10 companies went on from 2002 to 2006 where a total of 330 companies were acquired for over $98.8 billion. The acquiring companies that were looked at were Broadcom (NASDAQ:BRCM), Sisco Systems (NASDAQ:CSCO), EMC (NYSE:EMC), Google (NASDAQ:GOOG), Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), Sun Microsystems (NASDAQ:SUNW), Symantec (NASDAQ:SYMC), and Verisign (NASDAQ:VRSN).
Of those 330 companies that were acquired 133 we backed by venture capitalists. Of the 10 companies that were analyzed IBM acquired more companies than anyone else spending a total of $16 billion on 65 companies, 20 of which were VC backed. Broadcom on the the other hand acquired the smallest amount of companies spending a total of $835 million on 13 companies, 9 of which were VC backed. IBM might have picked up the largest amount of companies to add under its belt, but Hewlett-Packard was able to outspend everyone else by acquiring 38 companies for a total of $26.6 billion.
The total number of acquisitions that were web 2.0 companies was not disclosed but one can imagine that they made up a large portion of 330 companies that were involved. This goes on further to prove that acquisitions are exceeding IPOs as an exit strategy for many companies as a result of stricter regulations on requirements to go public. Oh yeah, its also been proven that an acquisition for more than a billion dollars doesn’t require a company to have a proper model for generating revenues.
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