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Aaron Solganick
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Aaron Solganick is the CEO and founder of Los Angeles-based Generation Equity Advisors, a technology and digital media M&A advisor and investment banking firm. For 20 years, he has worked as an investment banker and M&A advisor to several transactions with an emphasis on Software, IT... More
My company:
Generation Equity Advisors, LLC
My blog:
Technology & Digital Media Mergers & Acquisitions Blog
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  • Content Delivery Networks - M&A Update YTD 2014

    We noted a number of M&A transactions and capital raises announced the first half of 2014 within the Content Delivery Network ("CDN") sector in the United States. Most notably, NTT Communications acquired three companies with expertise in CDN, including Raging Wire, Arkadin and Virtela. In addition, several companies announced venture capital raises including Aryaka ($10m), Instart Logic ($26m) and Kaltura ($47m). We therefore believe there will be an improving M&A market for CDN companies looking to expand via mergers and acquisitions, or exit, in 2014 and 2015.

    Publicly Traded Content Delivery Networks (Selected) - Valuation Table

    (click to enlarge)

    Stock Prices are as of July 14, 2014

    M&A Transactions Announced (Selected), as of July 2014

    (click to enlarge)

    We believe there will be several types of potential strategic buyers of CDN companies over the next 12-24 months. Telecommunications companies (NTT, Vodafone, Verizon, ATT, ChinaCom) are the largest source of potential buyers followed by Cloud Services and Hosting companies, other CDN's and Hardware/Network vendors (Cisco, IBM, HP).

    (click to enlarge)Strategic Buyers Universe for Content Delivery Networks

    One of the main reasons of the growth in CDNs is swift expansion of Internet-based services such as online video, streaming media, online music, online games, and transfer of rich media files over Internet is expected to increase the strain on Internet infrastructures and also the demand for better Quality of Service (QoS). CDNs have emerged as an ideal solution to meet all these problems and to meet the demand of delivering better quality content to users. The global CDN market is driving on the growth of high implementation rate of CDN solutions in the U.S., Europe ("EU"), and Asia Pacific ("APAC") regions.

    The Content Delivery Networks market is expected to grow from $3.71 billion in 2014 to $12.16 billion by 2019, at a Compound Annual Growth Rate ("CAGR") of 26.8%. The Asia Pacific region is growing rapidly with a CAGR of 38.2%, from 2014 to 2019.

    Source: Markets and Markets, March 2014

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 23 5:38 PM | Link | Comment!
  • First Half 2014 Shows Further Upswing In Technology M&A Transactions

    We noted a further uptick in announced mergers and acquisitions for technology companies in Q2 2014. Technology mergers and acquisitions worldwide more than doubled in the first half of 2014, with deals worth $383.4 billion in that span, up 122% from the year-earlier figure, according to Mergermarket.

    The majority of technology deals happened in the U.S., trailed by the Asia Pacific.

    More than half of the M&A activity this year was during Q2 2014. The value of M&A's in Q2 tripled to $200.9 billion from $67 billion in Q2 2013.

    Yahoo! (NASDAQ:YHOO), Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) have been especially active in M&A this year as they all expand into new businesses and technologies. The telecommunications sector also showed a heavy uptick as it further consolidated.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 23 4:31 PM | Link | Comment!
  • IT Services Industry Sector - M&A Update For Q1 2013

    Generation Equity Advisors, a technology and digital media investment bank and M&A advisor, recently released its latest IT Services M&A update for Q1 2013.

    The following summarizes its key findings:

    Global consulting firms were very active in Q1 2013 and announced multiple M&A transactions.

    Highlights of IT Services M&A transactions announced in Q1 2013 include:

     

    • KPMG acquires purchasing and supply chain management consulting firm BrainNet and adds approximately 300 employees at 14 sites in Europe, Asia, the USA and Latin America.
    • KPMG acquires the Oracle ERP systems integration practice of The Hackett Group with estimated revenues of approximately $12 million in 2012.
    • Quadrant 4 Systems acquires Blazerfish LLC, Teledata Technology Solutions, Inc., and Momentum Mobility representing a combined $25 Million in gross revenue during the past calendar year (2012).
    • Teletech Holdings acquires Avaya specialist and communications systems integrator and consulting firm Technology Solutions Group.
    • Ernst & Young acquires Germany based J&M Management Consulting AG which has 320 employees across Europe and generated an annual revenues of approximately €50m in 2011.
    • Linedata Services SA agreed to acquire banking software development and consulting firm CapitalStream, Inc. from HCL Technologies Ltd. For $45 million.
    • Deloitte Consulting acquires talent and HR management consulting firm Bersin & Associates.
    • Deloitte Consulting acquires Salesforce.com and Microsoft SharePoint specialist consulting firm Vivens; based in Germany with 50 employees.
    • Deloitte Consulting acquires global strategy consulting firm Monitor Group.
    • Groupon acquires internet consulting services and software development firm Mashlogic.

    "Large global IT consulting firms were very active in Q1 2013," according to Aaron Solganick, CEO and founder of Generation Equity Advisors. "We believe that consolidation will continue for the next 12 to 24 months within the IT Services sector due to an improved U.S. and global economy and increasing demand for IT outsourcing."

    You can download the complete report (free) at: www.generationequityadvisors.com

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 04 7:19 PM | Link | Comment!
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