M&A: Microsoft makes more from selling than it spends on buying |
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M&A: Microsoft makes more from selling than it spends on buying
Microsoft this morning filed its annual Form 10-K with the Securities and Exchange Commission, a treasure trove for anyone digging for nuggets of information about the company. The first one that jumped out at me: Microsoft made more money selling companies than it spent buying companies in its last fiscal year.
The company says it spent $267 million to acquire five entities in its 2010 fiscal year -- a small fraction of its available balance of more than $31 billion in cash and short-term investments. That was down from $925 million on nine companies in fiscal 2009.
Meanwhile, the company says it sold three companies "for total consideration of $600 million" during the year. One of those companies was Razorfish, the advertising agency picked up in Microsoft's $6 billion purchase of aQuantive in 2007, which Microsoft sold to Publicis Groupe for $530 million last year. The other two aren't identified.
I'm checking to see if this is the first time the value of Microsoft's dispositions has exceeded the value of its acquisitions in any one year.
The trend doesn't look good news for startups holding out hope of being gobbled up by the Redmond company. Google has been more aggressive, reportedly acquiring at least 15 companies in the first seven months of the year, including Seattle-based Picnik.
The decline in acquisitions at Microsoft reflects a current reluctance inside the company to take on big and time-consuming purchases. Even with the declining level of acquisitions, the company is still grappling with a challenging integration, the combination with Yahoo's search engine under the partnership between the two tech giants. Microsoft finance chief Peter Klein said in May that it was unlikely the company would pursue another "mega acquisition" in the near future, calling such deals "very hard to do."
Acquisitions announced by Microsoft during the 2010 fiscal year include Toronto-based Opalis Software, which makes data-center automation technologies; and Sentillion Inc., a health-care software company.
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