The Internet of Things - Using M&A to deliver IoT strategies

January 2017

Overview

There are many publications on the IoT wave and its role in revolutionizing products and services across the consumer, healthcare, industrial and public sectors. In this publication and following editions, we will create a new thread under the IoT umbrella that will study how enterprises have used M&A and other inorganic means to deliver on their IoT strategies. 

A catalyst for M&A growth

For Fortune 500 companies, using M&A to accelerate delivery on an IoT-focused product vision is an important offensive strategy in protecting their turf against the competition. Other companies recognize the IoT wave as an opportunity to leapfrog competitors, too. For these businesses, many of whom are venture-backed start-ups, M&A is an important offensive tool in delivering on their IoT-led growth strategy which, in turn, informs the capabilities needed to be successful and the tactics (buy, build or partner) to acquire them. That preparation isn’t just for tech companies.

Spurring growth in mature markets across the IoT value chain

Our view includes not only the building blocks (sensors/actuators, processors, networking, connectivity, “things”), but also the platforms and solution providers that are important in enabling the design and deployment of IoT products and solutions.

Preparing for the coming IoT M&A wave

By 2020, market analysts expect the number of connected devices to range anywhere from 20 to 50 billion.1 The wide range in estimates over only a four-year period illustrates both the large opportunity at stake and the uncertainty in just how quickly the IoT wave is expected to revolutionize businesses across consumer and industrial end-markets.

1 Source: Woodside Capital Partners

In the M&A landscape within IoT, it is important to analyze deal activity in the context of the value chain to fully understand the far reaching nature of the IoT wave and the cascading effect that both organic and inorganic initiatives have had across the IoT ecosystem.

How PwC can help

A successful merger or acquisition can add significant value to a business. However, ensuring it delivers on a company’s planned IoT growth strategy can be difficult given the rapidly evolving nature of the market. It is imperative that businesses ensure each stage of the transaction process is successful to maximize value. This requires considerable experience and knowledge.

Our wide network is in constant touch with the IoT market, ensuring issues and opportunities are identified throughout the deal process. Our knowledge and experience within that market means that we can help businesses identify potential companies that would offer a good strategic fit and assist them with acquisitions, mergers and alliances that allow them to maintain and build their competitive advantage.

Contact us

Aaron Higley
Partner, US Technology
PwC’s Deals Practice
Email

Todd Ishimatsu
Director, US Technology
PwC’s Deals Practice
Email

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