Wael Aburida addressed a luncheon hosted by The Deal at the International Business Forum’s early stage venture capital conference in San Francisco on Wednesday, June 1. He left Intel Corp.’s M&A department after five years there earlier this year to become managing director and head of investment banking at Douglas Allyn & Curtis LLC, a Roseville, Calif.-based investment bank.
Aburida said acquisition strategies have shifted dramatically in recent years. He had five major insights into the high-tech corporate acquirer’s mentality these days:
- No dilutive acquisitions.
- The target technology must directly align with the acquirer’s specific needs.
- Strict valuation guidelines means no more stretching to finish a deal.
- Bigger deals are more difficult due to integration and regulatory obstacles.
- Less interest in companies with corporate headquarters and employees far from the acquirer’s main offices.
This weeks’s dealmaking activity bore out some of those points. Sun Microsystems Inc.’s deal for Storage Technology Corp. appears to have followed the first and third points. And eBay Inc.’s deal for Shopping.com proves out all five points to varying degrees. - Josh Jaffe
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Interesting stuff. In the space I cover, K2's CEO, Richard Heckman seems to be following most of these rules. The only exception being #5 with his recent acquisition of Volkl and Marker in Europe.
Recently, we have seen two blockbuster deals (for our industry) that could have some integration challenges and fall outside of these generalities - Amer Sports acquiring Salomon from adidas and Quiksilver acquiring Rossignol.