As deal rumors continue to swirl, Alphabet and HubSpot would be an odd pairing | TechCrunch

Reuters report On Thursday, Google parent Alphabet was exploring the possibility of acquiring Boston-based HubSpot, a CRM and marketing automation company with a market value of more than $33 billion, and the numbers in these reports have been climbing.

If such a deal were to occur, the costs would likely be considerable, involving a higher premium than current value. This must be part of the incentive for the company to sell and become a search giant. It’s worth noting that the two companies already have a partnership – one that uses Google Ads to drive HubSpot sales – which can sometimes be the start of such acquisition discussions.

While Google/Alphabet have been on an acquisition spree for years, the biggest deal ever was a spend Motorola Mobility $12.5 billion In 2011, it was later sold to Lenovo Only $2.91 billion sold, so it has reason to be shy about the higher price tag.The largest recent deal involved a $5.4 billion purchase of a security intelligence platform Mandatory in 2022Google’s valuation typically remains below $3 billion, so a deal of this size would be very out of character for the company.

When you combine this with the austerity plans most tech companies have implemented in recent years, as well as the warnings issued by Google CEO Sundar Pichai in January, More layoffs coming, this isn’t the type of deal that’s likely to happen in a belt-tightening environment, and certainly one that might be difficult to justify to employees if that perspective is indeed important. However, the company ended the year with a massive $110 billion in cash on hand. It certainly has enough cash from last year to make a move if it wanted to.

Another issue the company may face when trying to acquire HubSpot is an unfavorable regulatory environment for large deals. The US, UK and EU have been closely monitoring large transactions these days.some, e.g. Adobe’s attempt A planned $20 billion acquisition of Figma fell through due to competition concerns. It’s unclear whether Alphabet will face the same problem with its CRM tools. HubSpot faces strong competition from AdAdobe and Salesforce, two well-capitalized companies, so this doesn’t lock Google into that market in any way, but if there is a risk, there will certainly be termination fees involved to hedge the risk, which the company will need to consider another factor.

The question is how likely such a deal is to materialize, and what it would bring to companies that they can’t get from existing partnerships. As one analyst said to me, it feels unlikely, but you never know.

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