Apple made a big splash in the news when people started talking about the possibility of the computer giant acquiring Beats Electronics for $3.2 billion. The reason for the big stink is that it would have been the largest acquisition ever for Apple in their 38 years. The other, closest acquisition is the $429 million the company paid out for NeXT in 1996. The larger picture indicates that the real reason the Apple acquisition was such a big deal is that it comes in a string of, almost $1 billion “unicorn” acquisitions by major companies over the last year, more specifically in tech. The most notable of these acquisitions include WhatsApp and Oculus being acquired by Facebook, Waze and Nest Labs being bought up by Google, Microsoft absorbing Nokia, and Yahoo buying Tumblr. The real reason this surge of transactions is so significant is that prior to this year the last eight billion-dollar acquisitions of tech companies occurred over the span of ten years. The media flocked to these unicorn acquisitions covering the amount of money being exchanged, how the financing was going to work, the strategic ideal behind the deals, and the chance for success, the real story is how companies and investors need to adapt to enter and exit the market with this radical shift in who is buying and owning companies.
Enterprise acquisitions traditionally have made up most of the transactions over the past ten years. These, more traditional companies, include EMC, Oracle, IBM, and Cisco and they regularly make these multi-billion dollar transactions. For a more specific example consider that Cisco has made seven of these unicorn acquisitions for $25.2 billion and Oracle has gone through 10 unicorn acquisitions for $42.9 billion. Although these enterprise transactions occur frequently, the density of transaction in the tech/start-up industries in the past year have been unprecedented and it will be interesting to keep an eye out to see where things go from here.