This year there has been a healthy amount of Mergers & Aquistions activity, in terms of both volume and deal value, especially in the tech sector. The third quarter in particular has witnessed fascinating, not to mention record-breaking deals, including the largest IPO in history. So far, there have been quite a few individual deals worth well over $500 million, and some worth upwards of $1 billion. A handful of these huge deals involved acquisitions of gaming companies. These megadeals caused overall transaction values this year to soar well beyond 2013’s numbers, and we still have one more quarter to go.
Of those gaming company acquisitions, two are certainly worth mentioning. Microsoft acquired Mojang, the Swedish company that launched the widely played online game Minecraft. This purchase cost Microsoft $2.5 billion, a price tag that is likely indicative of just how popular the Minecraft game is around the world. Amazon also got in on the gaming action with its $970 million acquisition of Twitch Interactive. Twitch is purported to be the world’s leading video platform and community for gamers. Amazon already streams television shows and movies, so adding games to its repertoire certainly seems like a logical step.
A few other interesting deals that were announced this quarter that did not involve online gaming include Zillow’s acquisition of Trulia for $3.5 billion and Tutor.com’s acquisition of Princeton Review. Zillow and Trulia are already the big names for online home listings, with Zillow even delving into the Chinese real estate market. Now, these two real estate portals will be combining forces to further dominate the housing market. Although some real estate professionals may be concerned that this kind of merger will render them obsolete, there is no way to avoid the inevitable sharing of information online.
In addition, Tutor.com, which is exactly what its name suggests, an online tutoring service, acquired Princeton Review, a test-preparation company that offers its service in an array of formats, including live classrooms and online courses, as well as college admissions assistance. This merger seems like a natural fit, and we wouldn’t be surprised to see more online educational platforms merging, considering the growing availability of online instruction and its surging popularity.
Of course, deals of this size and magnitude require hours and hours of due diligence, including strict scrutiny of corporate documents and financials. This sort of secure document sharing and review can be simplified by using a virtual data room, which not only facilitates the M&A due diligence process, but also ensures the protection of sensitive and confidential information.