As connected car industry hots up M&A rises with it, claims new report
The level of merger and acquisition technology in the connected car space has hit record levels, according to new research from corporate finance advisory firm Hampleton Partners.
The connected car industry is getting a wide amount of hype. Gartner’s most recent hype cycle positioned autonomous cars and the Internet of Things at its peak of expectations, expecting both to reach a plateau of productivity within five to 10 years.
It’s no surprise, therefore, that M&A levels rise with these inflated expectations. There has been $14.1bn (£9.46bn) worth of publicly disclosed acquisitions in the sector since March 2012, with Hampleton noting transaction volumes had increased by approximately 40% in that time period. $4.9bn (£3.29bn) of transactions took place in the last year alone.
Not surprisingly, the glut of acquisitions took place in North America (56%), with 37% coming from Europe. The UK was the most prolific country in Europe in terms of acquisitions, with a total of 30 acquired targets.
The most popular space in which companies were acquired were enterprise applications (32%), including CRM automation, dealership management and insurance claims management, followed by Internet commerce and content (25%), such as auction websites and tyre retailers, embedded software devices and hardware (23%), such as location tracking and parking surveillance, and fleet management (20%).
The most active players in the market were Solera, with 12 acquisitions globally, and DealerTrack, with six.
This publication has looked at how driverless technology will impact the fleet industry in the past, so the Hampleton report represents an interesting analysis of the sector. The total transaction value of the fleet management market was $3.8bn (£2.55bn), with the report noting the hot nature of the sector – almost 60% of new cars sold in Europe are company cars. GPS tracking software was an important piece in the puzzle for various acquisitions, including TomTom, who acquired Coordina and DAMS Tracking.
The overall sense from the report was of an industry that is just starting to catch fire, according to David Riemenschneider, automotive sector principal at Hampleton. “With the rise of the connected car and the continued growth in embedded sensor technology, we anticipate the sector to remain robust, and startups focusing on technology enabling the development of semi-autonomous vehicles are expected to be quickly snapped up,” he said.
You can take a look at the full report here (email required).
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7 Sep 2015, 5:14 p.m.
thank you
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