The Merger and Acquisition Cycle: More Southern California Acquirers?
May 8th, 2007 by Benjamin KuoThere’s been a lot of rumors about an acquisition of Photobucket by MySpace in the last few days (to the tune of about $300M) , in what appears to be a wildly overheated M&A environment. Aside from waiting for actual details of the deal, it’s interesting to note how Southern California companies have started to become the companies doing the acquiring.
Historically, Southern California companies have been the ones being acquired — usually smaller venture funded firms here have been acquired by larger, Silicon Valley competitors. That still happens quite frequently–Google, for one, has made lots of acquisitions here. And, even the larger, public firms have been the targets of recent acquisitions–i.e. Digital Insight by Intuit, and Filenet by IBM.
However, I’ve noticed that there’s a lot more companies here on the acquiring side of the table nowadays– Broadcom (having recently acquired Octalica and LVL7); Systems, ValueClick (Shopping.net, Fastclick, Pricerunner), Websense (PortAuthority, SurfControl), Experian, Internet Brands (Client Shop, SlowTrav.com, DoItYourself.com, CruiseMates.com, CruiseReviews.com, among others). And, even in the case of acquisitions (for example, the acquisition of ExpertCity by Citrix, and the acquisition of Overture by Yahoo) large operations have continued to run here. The big difference is that with the acquiring companies here, you don’t get that big sucking sound the area has seen in the past when firms have been acquired companies from out of the area (two big examples: Geocities and Earthlink).
