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September 2, 2014

Top 10 mergers and acquisitions in the Internet of Things space 2014

The IoT market is seeing vibrant activity.

By Amy-Jo Crowley

Google & Nest Labs

In its second-largest acquisition ever, Google paid $3.2bn to buy Nest Labs, a maker of smart smoke alarms and thermostats for homes, back in January.

The search giant, which already had a 12% interest in the company, said the buyout would bolster its collection of smart products, while giving Nest Labs the opportunity to create more smart appliances and grow in other countries.

Sylvain Fabre, research director and analyst at analyst firm Gartner, told CBR in February that the acquisition signalled a landmark moment for information privacy as Google competes for a presence in the emerging Internet of Things (IoT) market

"There is the risk of hacking and misuse of machines…and if Google or other providers hold some information, we now know that there is a definite possibility that government entities may also access and use that information."

At Munich’s DLD Conference in January, Nest CEO Tony Fadell said that any data collected from users is used for improving its range of products.

Last month, hackers gained root access into a Nest Thermostat at the Black Hat Conference in Las Vegas within 15 seconds.

Zebra Technologies & Motorola

Zebra Technologies, a manufacturer of barcode, receipt, kiosk and RFID printers, agreed to buy a unit of Motorola for $3.45bn.

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Both companies offer bar-code scanning and radio-frequency identification, which they hope to combine to create a larger company that would specialise in tracking applications for everything from groceries to car parts.

The deal, announced in April, leaves Motorola, once a giant of the wireless business, with only its government and public safety business, and some leftover network technology, called iDEN.

Cisco & Tail-F Systems

Cisco is paying out $175m for a Swedish firm called Tail-f, which it hopes will boost its network-management tools for the IoT.

Tail-f, headquartered in Stockholm, provides tools to help companies install, manage and maintain networks and applications running on top of the network.

The deal is expected to close by the end of the fourth quarter of 2014.

Additionally, the San Jose-based networking firm agreed to buy Assemblage, a Danish developer of cloud-based collaboration tools, in June for an undisclosed amount.

Cisco’s head of business development Hilton Romanski said in a blog at the time that Assemblage will "help us capture the ongoing market transitions of mobility, cloud and the Internet of Everything (IoE)".

Google’s Nest labs & Dropcam

Google’s Nest Labs also acquired Wi-Fi video monitoring startup Dropcam for $555m in efforts to further expand the search giant’s home automation products.

The San Francisco-based company, which has been making Wi-Fi enabled, home-monitoring cameras for the past five years, last year raised $30m in funding for them. Using a special app, users can use them to see live feeds, zoom and record footage.

Dropcam will adopt Nest’s privacy policy, so that the data from the monitoring service won’t be shared with Google or any other company without a customer’s permission.

Microchip Technology & ISSC

Microchip Technology, which makes memory and analog chips, signed a deal to buy Taiwan-based wireless products maker ISSC Technologies for $328.5m back in May.

The deal is the first major overseas acquisition by the Chandler-based company, which it hopes will expand its Bluetooth and wireless products for IoT growth.

Atmel & NewPort Media

Atmel agreed to buy Newport Media, a provider of low-power Wi-Fi and Bluetooth systems, for $140m in July, as the chip maker puts part of its efforts into the Internet of Things market.

The San Jose-based company, which makes microcontrollers and touchscreen chips, said the deal will allow it to develop a variety of IoT products, including home and building automation equipment and consumer devices that require longer battery life.

"This acquisition immediately adds 802.11n Wi-Fi and Bluetooth to our offerings and will accelerate our introduction of low-energy Bluetooth products," Atmel’s President and CEO Steve Laub had said.

The deal, expected to be completed in the third quarter of the year, includes an additional earn-out of up to $30m to be paid out if future revenue targets are achieved over the next two years.

PTC & Axeda

Data management firm PTC announced plans to buy Axeda, a Massachusetts-based provider of cloud services, in July for approximately $170m.

PTC said that Axeda’s Connected Machine Management application set, which allows companies to remotely monitor and service products and deliver over-the-air software updates, will help PTC expand its footprint in the IoT space .

PTC’s CEO Jim Heppelmann added that the buyout will complement ThingWorx and "accelerate PTC’s ability to deliver best-in-class solutions across the entire Internet of Things technology stack."

Samsung & SmartThings

Back in July, Samsung took steps to acquire Internet of Things experts SmartThings.

The firm, snapped up for a reported $200m, lets people sync their devices and IoT gadgets with a standalone smartphone application.

SmartThings, founded in 2012, has some 5,000 developers building devices that connect to its open platform, and will now be relocating to Samsung’s Open Innovation Center in Palo Alto.

Samsung has also been touting its Tizen OS around town as a potential IoT operating system.

Samsung & Quietside

Samsung also announced plans within a week later to buy air conditioner firm Quietside for an undisclosed amount, in further efforts to strengthen its smart home business.

The company said it had acquired 100% of Quietside, which also manufacturers heaters andother HVAC appliances, but declined to comment of the price or other details.

"Because air conditioning products are a necessity in all buildings, including homes and offices, this acquisition is expected to be of help to our future smart home business," Samsung Electronics said in a statement.

Vodafone & Cobra Automotive

The UK mobile operator bought the Italian car technology group for £115m in June, taking further steps in becoming a provider of IoT car services.

Cobra provides security and telematics software, which collects and analyses data from computer-controlled car systems, such as steering and brakes, to the automotive and insurance industries.

Vodafone said the acquisition will expand its IoT growth strategy beyond connectivity by providing services on top of it.

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