The Hustle

Here is Apple’s M&A strategy

In the past 6 years, Apple has done 100 M&A deals. Most have been in secret.

May 5, 2021

Apple is known for its ironclad secrecy, particularly around new iPhone launches.

The same guiding principle informs the company’s mergers and acquisitions (M&A) practices.

As detailed by CNBC, the company is known for small and discreet deals.

Apple closed 100+ deals over the past 6 years…

… a pace of one about every 3 or 4 weeks.

While it did spend $3B on Beats by Dre in 2014 (its largest acquisition ever), Apple hasn’t made big headlines in a while.

This is in contrast to its Big Tech frenemy Microsoft, which just dropped $19.7B on AI firm Nuance, its priciest deal since buying LinkedIn for $26B+ in 2016.

One reason we don’t hear about the deals: Apple has strict NDAs and advises acquired employees to not update their LinkedIn profiles.

What Apple looks for in a deal

The iPhone maker focuses on filling gaps in its tech stack: It acquired tech for fingerprint ID (AuthenTec), iPhone Shortcuts (Workflow), Apple News+ (Texture), voice assistance (Siri), and Apple Music (Beats).

When Apple wants expertise in a sector, it will buy up multiple firms.

Take semiconductors: It bought P.A. Semi in 2008 ($278m), Intrinsity in 2010 ($121m), and Passif Semiconductor in 2013 (undisclosed).

Once a firm is targeted, Apple requests a demo

If there’s interest, the tech giant sends in the deal team (no outside bank is used).

Since the deals are primarily to acquire talent (AKA acquihires) — and not brand or customers — Apple makes an offer based on the number of technical employees (~$3m per engineer). It largely ignores revenue or previous fundraising valuations.

These individuals are then offered “golden handcuffs,” which are plush deals that vest over 3-4 years… hopefully enough money to make up for the fact they can’t update their LinkedIn profiles.

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