Amazon on an acquisition spree

11 Aug 2022 , 11:58 AM

Corporate buyers aren’t taking it easy this summer; they’ve been busy buying up technology firms even if the sector isn’t as cheap as it was in June due to the stock market’s recent gain.

Consider Amazon.com Inc. Last month, the retail and cloud storage juggernaut revealed a $3.49 billion acquisition deal for software company 1Life Healthcare Inc.; this week, it revealed plans to spend $1.65 billion for iRobot Corp., the company behind the Roomba vacuum.

According to Bloomberg data, roughly $13.4 billion in tech-related mergers and acquisitions have already been announced in North America in just the first 10 days of August, making it the busiest month since May.

The largest transaction involved the acquisition of tax software supplier Avalara Inc. by buyout firm Vista Equity Partners for $8.4 billion, including debt.

It is unexpected to see such a frenzy of agreements, according to Larry Feldman, a research analyst with United First Partners. August has traditionally been a slow month for M&A. According to him, improved market conditions for debt financing may be helping dealmaking.
And the industry is still less expensive than it was earlier this year, at the height of the raging bull market. Even though it is higher than the June low of 18.6, the Nasdaq 100 Index is currently valued at 22 times anticipated earnings, down from a recent record of 31 in September 2020.