Bumper day for M&A

One of my predictions for 2008 was that M&A would continue apace as valuations eased and IPOs dried up. If the first two weeks of the year is anything to go by, I might be proved right!

Yesterday, three significant deals were announced - although, to be fair, two of them were conclusions of bids started in 2007.

- Oracle 'won' its $8.5b battle for BEA Systems. raising its offer by 14% to $19.375 per share was enough to win over the board.

- SAP announced that it had enough shareholder support to conclude its €4.8b purchase of Business Objects.

- The new deal was Sun Microsystems buying MySQL for $1b. MySQL is a European-based open source database company which challenges the likes of Oracle, IBM and Microsoft. Although revenues are growing rapidly (up 50% last year) they still amounted to only $70m. But, I guess that's what happens when you distribute your software for free! This disruptive software model plays precisely with Sun's view of the world. But, even so, the $1b price tag looks pretty good!

This software consolidation is just the continuation of a well-established trend. What yesterday showed is that the turn down in tech stocks has made no effect on the appetite for M&A. Indeed in a conference discussion yesterday, I made the point that the only real opportunity for successful tech stock investment in 2008 would be to pick the M&A targets.

I'll return to M&A in more depth in the next week as the full M&A statistics for 2007 are collated and published.