There was a surge in merger and acquisition activity in the Internet infrastructure and mass-market Web hosting sectors during the first half of 2007, according to a study by Tier1Research, a division of The 451 Group. "The volume of activity picked up considerably from the previous year, with several larger deals in both the infrastructure and mass-market segments," said Philbert Shih, senior analyst at T1R.

The Internet infrastructure and mass-market hosting sectors continue to mature, and demand has returned to the point where vendors in this space are looking to commit themselves to the business long-term. As a result, vendors are seeking acquisitions to complement their organic growth efforts and achieve meaningful scale.

Other factors driving vendor M&A activity in this sector include the need for specific technological capabilities or facilities, international expansion, and strategic considerations.

"The hosting industry has always seen regular M&A activity, and the first half of 2007 was no exception," said Shih. "We believe M&A will continue to be a hallmark of the sector. The second half of the year should see less activity, but going into 2008, we should not expect that the M&A trend will slow."

About this study

This 47-page report, titled "M&A Review Series - Report 1: A Review of Merger and Acquisition Activity for the Internet Infrastructure and Mass-Market Hosting Sector," provides an overview of M&A activity in the Internet infrastructure and mass-market hosting areas for the first six months of 2007. The key details of more than 20 deals are presented, followed by in-depth analysis that summarizes the impact on the companies involved and the sector itself. Important M&A trends, present and emerging, are also identified.

The M&A Review is a tool for investors and industry executives who want to know about the main players in Internet infrastructure and mass-market hosting sector M&A, what valuations are being paid, and the driving forces behind this activity.

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