Brooke Sutherland is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

There were a lot of M&A records in 2015. Be it takeover volume, valuations, or the tally of mega-mergers, all reached new highs. But here's one boomlet you may not have heard about, and it's continued into 2016: Producers of all kinds of non-tech goods, from sports bras to cancer drugs and airplane parts, are pursuing tech-related takeovers like never before.

It's an easy trend to overlook because most of the transactions don't involve headline-grabbing prices (if they make the news at all). The vast majority cost less than $10 million or have no reported price tag. And yet, there have been a whole lot of them and the sheer magnitude makes it a phenomenon worth noting.

Companies in traditionally non-digital industries struck more than 1,600 technology deals last year, according to a study by a consulting arm of PwC. That's almost 50 percent more than in 2011, the reference point for the study. To put that deal count in perspective, it's more than the total number of private equity buyouts that took place in 2015, according to data compiled by Bloomberg.  

Companies in non-tech industries are gobbling up technology firms at a fast clip.
Source: Bloomberg, Strategy& of PwC

Just last week there were a few such transactions: Industrial giant Honeywell agreed to buy Movilizer, whose cloud software platform allows employees working remotely to share and analyze data on a company's existing IT system. The next day, CCL Industries -- a maker of labels for Pantene shampoo, Axe shower gel and other products -- announced the purchase of Checkpoint Systems to expand in the market for tech-driven "smart labels." Checkpoint makes radio frequency identification tags that retailers use to keep better track of their inventory, something that's gotten increasingly important as vendors market goods both in stores and online. 

These transactions -- and the many others that took place last year -- make a boatload of sense. It's the logical evolution of a world where everything from exercise to thermostats is getting "smart" (see Fitbit, Google's Nest). Rather than risk getting left behind, astute companies are looking for ways to incorporate technology into their existing products and businesses now.

Take General Electric. By PwC's count, the maker of airplane parts and power grid technology has bought or invested in at least 22 digital companies since 2011. The company says its newly created digital division produced $5 billion in revenue in 2015 -- which would put it on par with big-name technology companies including Adobe Systems. And GE is far from done. It eventually wants to reinvent itself as one of the 10 biggest software companies.

GE's Digital Push
It's already on its way toward becoming a big software company.
Source: Bloomberg, company filings
Figures reflect revenue from the latest fiscal year.

That idea of transformation makes this surge in digital investments quite different from the bulk of the M&A volume in 2015. Many of last year's transactions -- especially the biggest ones -- were driven by a quest for scale and the prospect of big cost savings. It's an ironic twist that these tiny technology deals may conceivably do more to keep companies relevant than those blockbusters.  

Of course, as the PwC analysts note in their study, technology investments are fraught with minefields for companies with less of a tech background. For one, it can be hard to find the right company with the right technology -- you need something not yet past its prime, but proven enough to not be a huge risk. Even software makers mess this up (see a lot of the things that HP has bought). Choice targets can be expensive, especially if other bidders get involved, and then you have to figure out what to actually do with the technology and how to get the people who developed it to stick around and help.

But the potential downside of not investing in the future trumps any of those risks. This trend isn't going away.  

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. The total deal count excludes investments in digital properties made strictly for the purposes of getting a financial return, including investments made by venture capital and private equity firms.

To contact the author of this story:
Brooke Sutherland in New York at

To contact the editor responsible for this story:
Beth Williams at