SASI Q1 2016 Storage Market Review: Private/Private M&A – More Than Just Talk

Storage M&A:

  • Deal volume keeps steady at 8 announced transactions but total consideration drops to $211M, the lowest level since Q1 2014
  • Of the 8 deals, only two were led by public buyers, HPE/Trilead and J2 Global/Intercloud
  • Last year we saw the beginning of the private/private and PE led M&A and we expect to see more through 2016
  • With all the consolidation and restructuring occurring in storage, it is great to see HPE enter back into the M&A market with its first deal since the HP breakup

Storage Venture Funding:

  • Q1 2016 marks the third consecutive quarterly decline in storage related venture funding.
  • The number of rounds stays level at 10 rounds while average round size drops to $24M
  • We do not see this as “Doom and Gloom” but rather a promising mix of earlier stage, smaller rounds coupled with a bit more “Sanity” in later stage venture investing
  • There is plenty of opportunities for further market disruption and the consensus is we are just starting to see true cloud infrastructure innovations being adopted by larger enterprises.  Winners will be looking for even higher levels of virtualization and convergence across applications, compute, storage and networking

 

About SASI:
SASI is a boutique M&A advisory firm focused on serving investors and entrepreneurs in the IT industry. We represent private companies that are exploring strategic M&A options. SASI was founded on the belief that stakeholders in private companies have a need for a new class of M&A advisor. They require a banker with high integrity who brings not only transaction and financial expertise but also has intimate knowledge of the industry, the strategic buyers and the customer, technology, and competitive trends shaping the industry. Our market focus is the IT industry with core areas of expertise across Data Protection and Storage, Cloud Computing/infrastructure, Networking and Security. SASI has deep domain knowledge of these segments and has represented companies across core technologies areas including semiconductors, systems, software, SaaS, and related IT services.

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