Internet of Things Newsletter

Fall 2020: IoT M&A in a COVID-19 Environment 

Rebound in IoT M&A

As we described in our previous newsletter, M&A activity, including that related to IoT, suffered during the first few months of the year as a result of COVID-19. Despite the current growing number of daily COVID-19 infections setting new record highs throughout the world, M&A volumes have bounced back aggressively, especially in IoT, and we expect that activity to accelerate heading into the next year.

COVID-19 has caused fundamental changes to our behaviors and environments. IoT solutions have played a critical role in changing the way manufacturers produce and deliver goods; companies manage and monitor their personnel; clinicians provide healthcare; and teachers educate their students. For example, IoT is solving the challenge of developing a supply chain capable of distributing the emerging COVID-19 vaccines at the extremely low temperatures required for them to remain effective by enabling fulsome ‘cold chain’ solutions that create knowledge about the temperature, sun exposure, vibration, and sudden impact of each critical shipment.

While there has been an increase in M&A activity driven by potential U.S. tax policy changes, we are seeing a growing appetite by strategic players to acquire IoT capabilities to advance their existing operations and by financial players that look to build IoT market leaders as the highly fragmented industry grows.