NEW YORK-Telecommunications reflected the dramatic drop in the number and size of mergers and acquisitions involving U.S. companies last quarter, Los Angeles-based Mergerstat reported.
Across industry sectors, these transactions numbered 1,954, down from 2,539 during the year-ago quarter. Communications companies announced 86 combinations this spring, compared with 136, while electronics firms posted 42 vs. 71 and computer software and related enterprises posted 434, down from 659.
The disclosed deal value for companies in all industries last quarter totaled $40.47 billion, a dramatic drop from the $261.1 billion tallied during the second quarter of 2000.
Communications companies were no exception, posting $278 million in transaction value during the latest complete quarter, down from $5.24 billion a year earlier. Even more dramatic decreases occurred in the electronics sector, which disclosed $573 million in mergers and acquisitions value, down from $15.73 billion during the same period of 2000.
Although M&A activity among companies categorized as computer software, supplies and/or service providers totaled $6.37 billion last quarter, that sum pales in comparison to the $31.34 billion total during the same three months of 2000.
Of the 114 companies in the telecom/wireless space identified by Mergerstat according to Standard Industrial Classification codes, there were no blockbuster deals topping the $1 billion mark. The largest transaction was the $290 million offer by Polycom Inc. to buy all of PictureTel Corp., a developer and manufacturer of visual communications systems. Private investors led by The Alfa Group announced the second-largest deal of the quarter, a $125 million bid for a minority stake in Golden Telecom Inc., which provides local, long-distance, cellular and data transmission services.
However, since only 33 of the 114 telecom/wireless-related companies made public the estimated value of the transactions they announced last quarter, it is impossible to categorize overall deal size in this area.
Within the group, there were 13 acquisitions of wireless telecommunications service providers, of which only the Golden Telecom deal made public the dollar value attached to it. Except for BCE Inc.’s purchase of less than 1 percent of WildBlue Communications Inc., a satellite Internet service provider, the rest of the acquisitions announced comprised 100 percent of the companies for sale.
In addition to Golden Telecom, they are: Mediafon Co, bought by First Capital International Inc.; Bravo Cellular by the Verizon Communications Inc.-Vodafone Group plc joint venture; PrimeCo Personal Communications L.P. by a private equity group led by Clarity; Third Millennium Telecommunications Inc. by ECOS Group Inc.; Omniplex Communications Group L.L.C. by CCC Globalcom Corp.; ZIM Technologies International Inc. by Private Capital Investors Inc.; Vodafone’s Tele.ring Telekom Service GmbH by Western Wireless International Corp.; Mobilee Inc. by Natural MicroSystems Corp.; Metawave Communications Corp. `s manufacturing assets by Viasystems Group Inc.; VoIP Telecom Inc. by New Millennium Development Group and WebLink Wireless Inc. by Metrocall Inc. However, the WebLink-Metrocall merger has since been called off.
An additional five of the telecom/wireless-related deals announced last quarter involved purchases of prepaid telecommunications services companies. The DataWave Systems Inc. deal to buy the Canadian prepaid card operations for $1.17 million was the only such transaction for which a dollar value was assigned publicly.
Texaco Inc. dipped its toe into telemetry by purchasing less than 1 percent of US Telemetry Corp. for an undisclosed amount.
VPN Communications Corp. agreed to purchase all of Tracker International, which manufactures global positioning system equipment, for an amount not made public. In two separate transactions, both for undisclosed sums, Microwave Transmission Systems announced agreements to buy all of Viper Communication Systems Inc. and CKS Management Inc.
