Finding the Pivot Points in Mergers

When most people think of M&A, they tend to think of the big or even mega-merger deals that more often than not fail to live up to the synergistic hype put forth during the merger announcement. It's the smaller deals that can allow a company to pivot more tactfully, often without the distractions of integrating two diverse cultures, rationalizing product lines as well as headcounts and reframing companywide org charts. Perhaps the shining star in these smaller deals has been Apple (AAPL). Its acquisition of Beats aside, the company has tended to do "tuck in" acquisitions to fill a strategic gap or add to its services.

We saw several such pivotlike moves this week, including the Verizon (VZ)-acquired AOL (AOL) scooping up Millennial Media (MM), a busted IPO from 2012 that focused on the mobile advertising space. Given the shift toward video as well as market share gains that benefited Google's (GOOGL) YouTube, Facebook (FB) and its Instagram property, and Twitter (TWTR), it's not surprising to see the revenue falloff at Millennial Media over the last several quarters. In hindsight, the departure of CFO Michael Avon in May 2014 was probably a "tell" as he left to "pursue other interests."...312 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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