Over the past twenty years or so, we've seen an incredible amount of change in the traditional merchant board markets. But, none more dramatic than the Mergers and Acquisitions (M&A) activity involving board makers over this period. My records show that 76 board companies were bought and sold through the Spring of this year, starting with Intel selling their Multibus board group to Radisys in 1987. I'll try to walk you through the most significant ones here.

The sell-off began in earnest in the late 1990s, with five sales in 1998, seven in 1999, six in 2000, and eight in 2008. The peak year was 2004, when nine companies were bought/sold.

Looking closely at these transactions over the years shows some distinct patterns. Also, we can see that some large companies acquired board companies, only to divest them after a few years. Intel is a good example of this. It sold its Multibus group to Radisys (1987) and got out of the board business. Then, it bought Dialogic in 1999 (for about 2.6 times sales) and Ziatech in 2000 for about 3.4 times sales.

Intel then sold the Ziatech group to Performance Technologies in 2002, and sold the Dialogic telecom board group to Eicon in 2006 (along with Intel's Media Server Group). Finally, Intel exited the telecom board business by selling the remnants of its board group to Radisys (in 2007, for 0.50 times sales, plus cash for its existing inventory). The devastation in the telecom board segment is glaringly clear when you look at the prices these companies were purchased for, compared to what they garnered when sold off.

Other patterns of note include the entry and sustained activity of SBS, Curtiss-Wright, Mercury Computer, and GE/Fanuc in the increasing M&A activity. SBS bought Greenspring (in 1995), Bit 3 (1996), Logical Design (1996), OR Computer (1998), VI Computer (from Themis, 1997), SDL (2000), Essential (2002), and Avida (2003). It then sold the entire company to GE/Fanuc in 2006 for about 1.4 times sales. SBS initiated the M&A frenzy in the board business, but they rapidly became over-invested in telecom, and finally had to sell out.

Now let's look at Motorola's board group and its acquisitions. Motorola bought Prolog (1999) in their own preparation for the coming telecom wave. They bought Bluewave (2001) in a stock-swap deal) to get into the DSP-driven telecom segment. (Bluewave was a merger between Mizar and Loughborough Sound in 1997). Moto bought Paceline and Netplane (both in 2003) to get into serial fabrics on telecom boards. Then, they bought Force Computers from Solectron in 2004 to gain market share in the European ATCA market.

Three weeks after Intel exited the telecom board business and sold out to Radisys, Motorola announced the sale of their entire board group to Emerson (in 2007 for 0.67 times sales). Again, over-investment in telecom and the abandonment of traditional products and markets were the bricks that paved the path to divestiture.

During this rampant acquisition period, and during the great telecom love-fest, the Contract Electronic Manufacturers (CEMs) also got into the M&A game, with poor results. Solectron bought Force Computers (1996) only to sell them to Motorola's board group (2005). Celistica bought the HP's embedded group in 1998, and they were never really heard from again. Solectron also bought Smart Modular Computers in 1999. CMAC bought MIL/COTS board supplier DY4 Computers in 2000, and then CMAC got bought by Solectron in 2001. DY4 was later sold by Solectron to Curtiss-Wright in 2004.

In 2002, Solectron bought Compaq Computer's embedded group. Five years later, Solectron was sold to Flextronics for less than 0.30 times sales, according to the stock-swap prices at the time.

Curtiss-Wright, at the time, was focused on the MIL/COTS markets. Hence, it purchased Lau Defense in 2001, and the recently acquired VISTA. DY4 bought Ixthos (1998), then DY4 then was acquired by CMAC in 2000, and CMAC by Solectron in 2001.