In mid-March, Intel announced it was acquiring Mobileye, an Israeli company that makes sensors and cameras for driverless vehicles, with the goal of becoming “the industry leader in autonomous driving.” Analysts described the move as an effort to keep up with competitor Qualcomm, which agreed last year to acquire Dutch chip manufacturer NXP, a leading semiconductor solutions supplier to the automotive industry, for $47 billion. Samsung and Softbank have made similar investments, while Uber, which suspended its tests in late March after an accident, and Google have been conducting tests of driverless technology on city streets.

With acquisitions such as these becoming almost a daily occurrence, I believe we are now in a full sprint toward the fourth industrial revolution characterized by a fusion of technologies into physical, digital, and biological spheres. Make no mistake, all businesses will be affected. Smart companies will incorporate technology into every aspect of their business models either organically or through acquisition to keep up or remain a step ahead of competitors.

When heading to market, companies with value add technologies that demonstrate true leadership in their industries will command larger multiples. I don’t know what the next great idea is going to be, but I’d be willing to bet that, once announced, it will seem quite simple, at least at its core. Implementation will take place rapidly and those with capital restraints will find themselves in a bad spot: behind their competitors. Healthy lines of credit for well-run companies may be the silver bullet to make swift acquisitions or assist with implementation of new technologies. If your company can support a high credit line, get it. You just might be glad you did.

Sources used:

Financial Times

New York Times

weforum.org

 

 

 

 

 

 

About the author

Ryan Duschak  |  Vice President
Phone: (214) 694-2253
Email: rduschak@allcapcorp.com