M&A: Current drivers and future directions

Activity around mergers and acquisitions is constant background chatter across most industries for a variety of different reasons, some industry-specific, some related to the wider economic backdrop. Recently though that chatter has risen to a definite murmur that catches the ear in the broadcast space, both in terms of activity confined to the vendor community and in terms of broadcasters looking to acquire new technology. Indeed, some of the deals which have seen broadcasters chase down tech, which was a significant factor in Comcast’s $38bn acquisition of Sky, for instance, have been nothing short of deafening.

The current drivers are multiple. But, looking at vendor activity first, lying at its heart is the simple fact that if you tot up the number of companies on the showfloor of any major tradeshow and then divide the available industry revenue between them, the numbers rarely add up and the ongoing effort is not sustainable.

Adam Cox, head of imaging & pro video at Futuresource Consulting points to the fact that M&A is not only part of the natural economic cycle or a market, but also a signal that a particular market has likely progressed beyond its peak.

“Inevitably the technology matures, markets become commoditised, value declines and it becomes increasingly difficult to maintain competitive advantage,” he says. “So, companies identify the “next big thing”, strategically acquire competitors to…