Mergers & Acquisitions

The Biggest Acquisitions of 2020 (So Far)

2020 has been (and continues to be) a challenging year. Amid these tough times, the first priority for corporations has been to keep their employees and businesses safe. However, many companies have shown resilience even during this turbulent period and have managed to take strategic decisions to grow and expand their businesses via acquisitions.

Here’s a look at some of the prominent acquisitions of 2020 so far (in terms of deal value, in no specific order). 

Intuit – Credit Karma

In February, Fintech giant, Intuit (INTU) announced that it would be acquiring Credit Karma for approximately $7.1 billion, making it Intuit’s largest acquisition ever. Intuit is a global financial platform company with TurboTax, QuickBooks, and Mint as its flagship products. Intuit’s financial management solutions serves approximately 50 million customers worldwide while Credit Karma is a consumer technology company with more than 100 million members in the U.K., U.S., and Canada with a high millennial user base. Credit Karma had reported nearly $1 billion in unaudited revenue in CY 2019, up 20% from CY 2018. The transaction is expected to close during 2H 2020.

Grubhub – Just Eat Takeaway

In June, Just Eat Takeaway entered into an agreement to acquire Grubhub (GRUB) for $7.3 billion. The move marks Just Eat Takeaway’s foray into online food delivery in the U.S. with the two companies together creating the world’s largest online food delivery company outside of China. Grubhub is a leading online and mobile food-ordering and delivery marketplace in the U.S., with nearly 300,000 restaurants across 4,000 U.S. cities. The deal sidelined Uber, which had been in talks with Grubhub for acquisition.

Uber – Postmates

In July, Uber (UBER) entered into $2.65 billion deal to acquire Postmates. This comes after Uber’s $6.5 billion bid for Grubhub fell through. Postmates is complementary to Uber Eats, with differentiated geographic focus areas and customer demographics. Postmates is a pioneer of “delivery-as-a-service,” which would complement Uber’s growing efforts in the delivery of groceries, essentials, and other goods.

Visa – Plaid

Visa (V) announced the decision of Plaid’s acquisition for $5.3 billion in January 2020. Connectivity between financial institutions and developers has become increasingly important with the growing demand to facilitate consumers’ ability to use fintech applications. Plaid enables consumers to conveniently share their bank accounts with thousands of apps and services, such as Acorns, Betterment, Chime, TransferWise, and Venmo. Plaid connects with more than 11,000 financial institutions to more than 2,600 fintech developers. The acquisition will open new market opportunities in the fintech space for Visa, both in the U.S. and internationally.

Morgan Stanley – E*TRADE

The acquisition announcement of E*TRADE (ETFC) for approximately $13 billion by Morgan Stanley (MS) in February 2020 has been one of the biggest acquisitions of 2020. The decision is expected to boost Morgan Stanley’s position across all channels and segments in the wealth management business. E*TRADE has over 5.2 million client accounts with over $360 billions of retail client assets, which will be added to Morgan Stanley’s existing 3 million client relationships and $2.7 trillion of client assets. The deal is expected to be closed in Q4 CY 2020.

Other Deals

Out of the other acquisitions that have happened over the past seven months, here are few more which are in billions in deal value:

  • In February, Salesforce (CRM) announced a $1.33 billion deal to acquire Vlocity, a leading provider of industry-specific cloud and mobile software built natively on the Salesforce platform
  • To strengthen its capabilities in 5G, Microsoft (MSFTannounced the intent to acquire Affirmed Networks in March and completed the process in April for approximately $1.35 billion
  • Zoox, a California-based company working on autonomous technology to enable mobility-as-a-service, has been acquired by Amazon (AMZN) for roughly $1.2 billion

Among private companies:

  • Koch Industries decided to acquire the remaining equity stake in Infor held by Golden Gate Capital in a deal worth close to $13 billion. Koch completed the acquisition of Infor in April. With estimated annual revenues of $110 billion, Koch Industries is one of the largest U.S. private companies
  • In January, Insight Partners, a leading software investor, entered into an agreement to acquire Veeam, a Swiss cloud data management company in a $5 billion deal
  • In March, BMC, a global leader in IT solutions for the digital enterprise (a KKR portfolio company), signed a definitive agreement to purchase Compuware for an estimated $2 billion. The process was completed by May
  • To strengthen current offerings and broaden its ecosystem, SoFi, an online personal finance company, entered an agreement to acquire Galileo, a financial services API and payments platform, for $1.2 billion

Overall activity in the M&A space remained subdued amid the pandemic. During 1H 2020, 24,698 deals were announced globally, marking a 15.1% decline from 1H 2019. The drop is sharper in terms of deal value, which witnessed a fall by 44.7% from $1.85 trillion in 1H 2019 to $1.02 trillion in 1H 2020, according to a report by GlobalData.

While the fate of these acquisitions will only be known with time, a BCG report does demonstrate that “deals done during weak economic times create value for dealmakers and their shareholders.” 

Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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