The tech M&A boom is a mid-life crisis. Older companies think they can stay in the game by absorbing fresh young startups.
The old-school reason for conducting M&A deals is that one company thinks it can achieve financial synergies by acquiring or merging with a similar company.
But the type of deals being done now represent a change from the norm. By putting a premium on long-term demographics over short-term synergies, acquirers are behaving like glorified venture-capital firms, spreading their risk around by lots of different types of start-ups, letting them stay autonomous, and hoping that a few of them will get huge (Integration? Noooooo!)
For the foreseeable future, buying a hip, young start-up will probably remain corporate America’s favorite way to stave off time’s cruel march, or at least have fun trying.