“Straight Outta Compton” and into Apple’s Boardroom

Despite credible rumors, one of the most talked about deals has finally been confirmed – Apple will acquire Beats Music & Electronics for $3 billion.

29 May 2014


"Nuthin' but a 'G' Thang” should be "Nuthin' but a '$' Thang.” Despite credible rumors, one of the most talked about deals over the last few weeks has finally been confirmed – multinational computer electronics company Apple will acquire Beats Music & Electronics for a cool $3 billion. Big kudos goes out to Dr. Dre who may become hip hop’s first billionaire (or close to it) post Beats acquisition.  (Sorry Jay Z, even if I counted Beyonce’s $350 R&B millions, you still wouldn't be a billionaire.)

Since the beginning of the deal rumors, there have been mixed feelings about the acquisition from deal analysts, the media and consumers. In addition, as many commentators have observed, it’s unusual for Apple to make big deals like this – the Beats deal in particular marks Apple’s largest acquisition since NeXt for $400 million. According to the WSJ, the computer electronics giant acquired Beats because “Apple wants to regain the beat in its music business.”  Those in favor of the deal agreed that Apple’s new direction might be good for the company, while the opposing side voiced concerns that the deal could hurt both brands.

No matter how you feel about the deal, we believe that the heightened levels of deal activity that we are now seeing in this sector are just the beginning.  As we’ve seen already this year, deals in the Telecommunications, Media and Technology (TMT) sector are booming.  With recently announced deals like Comcast / Time Warner Cable, Facebook / Oculus and the even more recently announced AT&T / DirecTV acquisition breaking headlines, increased deal count in the TMT sector should come as no shock to regular readers of the Intralinks Deal Flow Indicator (DFI) Report.  Taking a look at data from the recent Intralinks DFI , we saw strong deal flow from TMT. Five of the ten largest deals during Q1 occurred in this sector, with announced deal volume and value increasing 5% YoY to 542 deals, and 70% to $179.9bn, respectively.

With the TMT sector helping to drive deal volume, it’s safe to assume that all signs point to sustained momentum in M&A activity through 2014.

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