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Merger market rises around Boston

A flurry of buyouts involving Boston companies this week suggests that the merger market is rebounding, and that big corporations with deep pockets are increasingly courting Hub technology start-ups in the hunt for talent and technology.

In quick succession, computing giant IBM agreed to pay a reported $800 million for cybersecurity start-up Trusteer Inc.; mobile advertising company Jumptap Inc. sold for $200 million; and Agero Inc., a provider of nationwide automotive roadside assistance, sold off a big chunk of its business for $530 million in cash.

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Those three acquisitions followed Twitter Inc.’s recent decision to buy three local start-ups and as much bigger Internet brands like Yahoo Inc. have launched nationwide corporate buying sprees.

“Corporations have been sitting on a lot of cash, and they are finally starting to spend it, and they are using it for acquisitions,” said Jeff Christian, chief executive of Jeff Christian & Co., which works with corporate clients on talent and business acquisitions.

Christian said he is working on several acquisition deals in the Boston area that should close in the coming months.

Many of the recent deals in the Boston area are the result of consolidation that is going on in several areas of the technology sector, Christian said. Start-ups that grew up around the same time and target the same markets reach a point where they realize they cannot compete, and start to entertain offers from competitors.

Jumptap, for instance, was acquired by a competitor in the mobile advertising business, Millennial Media Inc. Also this week, Needham’s Extreme Reach Inc. agreed to pay $485 million to buy out a part of its rival in the digital ad delivery business.

Medford’s Agero had several suitors for its “connected car” division, which provides the technology for such in-car features as navigation and maintenance reminders. On Thursday, it announced it would sell that business to satellite radio provider Sirius XM Radio Inc. for a half- billion dollars.

Agero chief executive Dave Ferrick said the company became interested in selling off that part of its business as Apple Inc. and Google Inc. starting moving in a big way into the connected-car market, with products for drivers to use mobile apps and log onto the Web from inside their cars.

The sale leaves the company extremely healthy, Ferrick said, and gives it a war chest to look for another acquisition.

Agero will focus on its core business of providing roadside assistance and auto claims management for insurance companies

But even with the recent spike in acquisitions, the number of technology mergers in Massachusetts is far below the number in 2007, which saw 133 deals worth $7.56 billion, according to numbers from S&P Capital IQ. The New York research firm estimates that by year-end, Massachusetts will have 89 deals. In 2012, there were 102 deals.

But the prices companies are willing to pay for start-ups are rising fast. S&P Capital expects the value of all deals in 2013 to reach $6.27 billion, compared with $1.69 billion in 2012.

IBM’s deal to buy Trusteer for about $800 million is one of the largest of the year so far. The acquisition will further add to IBM’s cybersecurity division in Waltham, and give it a research and development lab in Israel. Trusteer had about 200 employees split between Boston and Tel Aviv.

“We buy companies for their customers, for their employees, and then for their technology,” said Marc van Zadelhoff, a vice president with IBM Security Systems.

But even in hot merger markets, with companies eager to sell, making deals can be difficult.

“If you want to find something special, it’s never easy,” van Zadelhoff said.

Michael B. Farrell can be reached at michael.farrell@globe.com.
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