Insight

Internet of Things Newsletter

Fall 2020 M&A Newsletter

Joseph Radecki

Joseph Radecki

Managing Director and Co-head, TMT Investment Banking, KPMG Corporate Finance LLC

+1 312-665-4401

 

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.



Q3 2020 saw a continuation of strong IoT M&A volumes as companies continue to view IoT solutions as a way to operate in the new environment3


Last Four Quarters – IoT M&A Activity1


Last Four Years – IoT M&A Activity1


Total global IoT deal volume in Q3’20

The IoT sector saw 39 deal announcements in Q3’20

$30.1bn Aggregate deal value in Q3’20

The aggregate deal value in Q3’20 was $30.1bn, significantly higher than $0.5bn aggregate deal value announced in Q2’20


 



Healthcare IoT solutions continue to be of strong interest to acquirers


IoT M&A Activity (By Sector) – Deal Volume1


IoT M&A Activity (By Sector) – Deal Volume1


In this edition of our IoT Newsletter, we discuss the current status of IoT M&A in light of the ongoing impact of COVID-19 and shine our spotlight on IoT’s role in the distribution of COVID-19 vaccines and increasing utilization of IoT technologies within the industrial and smart building sectors. To read the full report, download the PDF below.

Internet of Things Newsletter
Download the full report


We continue our regular dialog with leading IoT and industrial IoT companies and would be happy to discuss the insights we have gathered as one of the significantly active M&A advisors in IoT.

Footnotes

  1. M&A analysis is based on the deals announced during the respective periods. Deal value represents aggregate value for disclosed transactions
  2. Includes all IoT M&A deals except Healthcare IoT M&A deals during the respective periods
  3. M&A data is per Research451 Database

 

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KPMG Corporate Finance LLC’s investment bankers have extensive Technology transaction and industry experience, which enables them to understand the industry- specific issues and challenges facing our clients.