Companies throughout the tech sector seem to be on a buying spree of late. Oracle, which specializes in database management systems and related corporate software, has completed 67 acquisitions in the last five years. Hewlett-Packard has added Palm and 3Com to its portfolio since last fall. And a bevy of other deals -- or attempted deals -- ranging from Microsoft's pursuit of Yahoo to information infrastructure company EMC's acquisition of Iomega, a producer of networking storage hardware, have been proposed or completed recently.

In many of these recent instances, the target company has lost some of its brand luster or market strength and the acquiring company, attracted by a bargain-basement price, thinks it can do a better job of running things. For example, Palm bet big on one device -- the Pre smartphone -- to turn around the company's fortunes. But the move didn't pay off: In February, Palm cut its revenue forecast; in March, it reported a quarterly loss of $22 million; and in April, the company cut its forecast again. On April 28, HP announced that it had purchased Palm for $1.2 billion, looking beyond the company's problems to see an opportunity to use Palm's well-received WebOS mobile operating system to compete with Apple's iPad.

Other recent examples: Sun Microsystems was losing money -- $2.2 billion in fiscal 2009 -- amid a revenue slide and various restructuring efforts when Oracle came calling in April 2009. Oracle said Sun was unproductive and too decentralized, and outlined a repair plan when it closed the $5.6 billion deal in January to buy the computer company. And Microsoft made a $44.6 billion bid for Yahoo in early 2008, hoping to gain more search engine market share to better compete with Google. But Microsoft ultimately settled for a partnership with Yahoo rather than a merger.

"Palm, Sun and Yahoo were all at inflection points," notes David Hsu, a Wharton management professor. "Acquirers are trying to airlift the brands, technology and know-how and embed them in a different setting to maximize success."

More than typical M&A activity, these deals -- and others like them -- show that the technology industry has matured, say experts at Wharton. Once companies reach a certain size, acquisitions are one of the few ways to grow and keep the innovation cycle going. As technology companies find it increasingly difficult to move the revenue needle by acquiring startups, larger acquisitions of former superstars have become the focus.

"The technology industry is evolving. You can see it mature," says Saikat Chaudhuri, a Wharton management professor. Andrea Matwyshyn, a legal studies and business ethics professor at Wharton, agrees: "Tech companies are demonstrating the patterns we see in industries with more longevity."

The goal of these more mature takeover strategies is to gain market share, enter a new market or acquire intellectual property that can head off a competitor. Some technology companies, such as Cisco Systems and Google, tend to buy smaller firms. An increasing number of acquisitions within the industry, however, more closely resemble leveraged buyouts in which the objective is to find value, make the target more efficient and reap the rewards, says Hsu. But these acquisitions come with the usual risks and challenges associated with bringing any new arrival into an acquiring company's fold.

The big difference between what's happening in the tech sector and a traditional leveraged buyout is that there is little to no debt involved in the recent tech deals. "Microsoft, Oracle, Apple and others have a ton of cash," notes Hsu. "To take the leveraged buyout approach [and turn around a company] you have to be able to finance it. Technology companies have the resources." Indeed, HP had cash and equivalents of $14.1 billion as of April 30; Oracle had $9.3 billion as of February 28, and Microsoft had $8.1 billion ($39.7 billion, if you include short-term investments) as of March 31. "For many of these companies, it's like they have money burning holes in their pockets," says Wharton management professor Lawrence Hrebiniak.