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July 18, 2016

6 of the biggest UK tech acquisitions by overseas giants

List: As Softbank acquires ARM, CBR looks at some of the biggest acquisitions of UK companies.

By Alexander Sword

One of the frequently asked questions about the UK tech sector is why it has never produced a Google or an Amazon: a world-changing titan with dollar valuations in the hundreds of billions.

While the scene continues to produce innovative companies, many end up being acquired by the Googles and Amazons before they ever reach this stage.

In a recent interview with CBR, Autonomy founder Mike Lynch gave his thoughts on how the UK can create more scalable companies.

Read parts 1 and 2 of the exclusive interview here and here.

CBR looks at some of the biggest acquisitions of UK companies from overseas.

 

1. ARM

Who: Softbank acquires ARM

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When: July 2016

How much: £24 billion

ARM confirmed this week that it will be acquired by Japan’s Softbank for £24bn, driving its share price up 45 percent.

The deal will be funded by Softbank’s own cash reserves and a long term loan from Mizuho Bank. The £24 billion offer is around a 43% premium on its closing market value of £16.8 billion on Friday 15 July. 

Softbank gave assurances to ARM including preserving the current ARM organisation, senior management and partnership based business model. Softbank also pledged to at least double the employee headcount at the Cambridge-based company and also increase the headcount outside the UK over the next five years.

ARM designs microchips used in smartphones such as those made by Apple and Samsung.

ARM acquired fellow UK company Apical, an imaging company, in May for $350 million in cash.

 

2. Autonomy

Who: HP acquires Autonomy

When: October 2011

How much: £7.4 billion

Autonomy was acquired by Hewlett-Packard (HP) in October 2011. The deal valued Autonomy at £7.4 billion, a figure that would come back to haunt both parties within a few years.

Since the acquisition, HP has been suing two Autonomy executives, Mike Lynch and Sushovan Hussain, claiming that they deliberately misrepresented the value of the company prior to the acquisition.

These claims have been fiercely countered by Hussain and Lynch.

Autonomy specialised in analysis of large scale unstructured "big data" and became the UK's largest and most successful software business by 2010.

 

3. Telecity

Who: Equinix buys Telecity

When: May 2015

How much: £2.35 billion

Telecity is a data centre company that runs operations for Spotify and Facebook.

American rival Equinix bought it in May 2015, derailing a merger with the Netherlands-based Interxion to create one of the world’s largest data centre companies.

It did this by trumping the Interxion offer with a higher bid of £11.45 per share, which was 27.3 percent above Telecity’s closing price before talks were announced.

The deal has now been approved by the European Commission and closed in January 2016.

 

4. Swiftkey

Who: Microsoft acquires Swiftkey

When: February 2016

How much: £250 million

Swiftkey is a popular predictive text app that can be found on over 300 million smartphones using Android and iOS. Its technology has been used in Samsung and Blackberry smartphones.

Microsoft bought Swiftkey to incorporate its machine-learning technology into its own virtual personal assistant app Cortana.

It also wants to enter into the software keyboard market with its own Word-Flow smart keyboard, with the intention of targeting iPhones and Android phones with the keyboard.

Microsoft Technology and Research executive vice president Harry Shum said: "In this cloud-first, mobile-first world, SwiftKey's technology aligns with our vision for more personal computing experiences that anticipate our needs versus responding to our commands, and directly supports our ambition to reinvent productivity by leveraging the intelligent cloud.”

 

5. Deepmind

Who: Google acquires Deepmind

When: January 2014

How much: £240 million

In January 2014, Google signed an agreement to acquire the UK-based artificial intelligence company DeepMind Technologies.

The acquisition was expected to support Google in projects like self-driving cars and robots by combining DeepMind's artificial intelligence technology.

According to reports, Goole paid about $400m.

DeepMind Technologies was founded in 2012 by Demis Hassabis, Shane Legg and Mustafa Suleyman and makes applications which is used in simulations, e-commerce and games using general-purpose learning algorithms.

The London based company claims to combine the best techniques from machine learning and systems neuroscience to generate powerful general-purpose learning algorithms.

 

6. Magic Pony

Who: Twitter acquires Magic Pony

When: June 2016

How much: £102 million

Twitter acquired the London-based machine learning company Magic Pony in June 2016.

The company uses machine learning for visual processing, which will build on other investments Twitter has made in machine learning, such as the acquisitions of Madbits and Whetlab in 2014 and 2015 respectively.

Magic Pony’s team will be joining Twitter Cortex, a team of engineers, data scientists, and machine learning researchers.

Magic Pony’s technology, algorithms that can understand the features of imagery, will be used to enhance Twitter’s live and video products.

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