Recent Tech M&A Uptick: Drunken Sailors or Value Creators?

There has been no shortage of tech M&A activity over the past 6 months. It seems as though the cash-rich IT players aren’t afraid to start spending some serious dough. Are these guys just antsy with billions on the balance sheet or are they making smart, competitive bets that signal even more activity to come?

Two companies come to mind that have recently exemplified this ravenous appetite for deals. HP has moved to acquire no less than 4 companies in 4 months, with two of these having over a $1B price tag. On the heels of its $2.7B acquisition of 3Com at the end of 2009, the company has acquired Palm, several venture-backed tech vendors and is currently in the midst of an escalating battle for 3par with rival Dell. 

On the healthcare technology side, Ingenix has been holding its own. A wholly-owned subsidiary of the UnitedHealth Group, Ingenix has announced 3 considerable tech acquisitions in recent months, including Axolotl, QualityMetrics and Picis.

The question becomes, is this recent boon a result of the need for competitive positioning or shareholders looking for value creation from ever-increasing piles of cash (HP with $15B and Ingenix (UHC) with $12B)? It is yet unclear. With Intel’s $8B deal for McAfee and active interest in Infineon’s $2B wireless chip unit, however, the ranks of the acquisitive tech-sphere seem to be swelling.

This is a great sign for expansion stage businesses with an eye towards continued growth and a strategic exit. Venture capital firms can find some comfort in the thawing of the M&A market with the public markets still seeming ice cold.

What’s your pick for the next big deal? My sense is that Oracle and Cisco seem to be awfully quiet and I can’t imagine they will want to be left out of the party for too long…