News and Research

Software M&A Update and Report for Q4 2018

February 10, 2019 – Investment bank Solganick & Co. has published its latest software M&A Update and Report for Q4 2018.  The following highlights the latest software mergers and acquisitions including valuations. You can also download the complete report here: Solganick Co Software MnA Update Report Q4 2018

Q4 2018 – Software M&A Update

  • Total software M&A transaction volume in Q4 2018 was 233 compared to 265 in Q4 2017.
  • Total transaction value in Q4 2018 rose by 205.73% compared to Q4 2017, from $25.09 bn to $76.71 bn.
  • Median Deal Size in Q4 2018 was $100 mn compared to $50.5 mn in Q4 2017
  • The software industry continues to be very active:
    • Microsoft acquired Github for $7.5 bn
    • IBM acquired Red Hat Systems for $34 bn
    • Cisco acquired Duo for $2.35 bn
    • Paypal acquired Hyperwallet for $0.40 bn

Valuation Highlights:

The average M&A EV/Revenue multiple for software companies paid was 5.77X in Q4 2018.

The average M&A EV/EBITDA multiple for software companies paid was 26.92X in Q4 2018.

Strategic acquirers paid an average of 7.2X EV/Revenue multiple for software companies in Q4 2018.

Solganick & Co. provides investment banking and M&A advisory services to the global software industry sector. For more information, please contact us.

 

Frequently Asked Questions

1 How did software M&A activity in Q4 2018 compare to the previous year?

In Q4 2018, total software M&A transaction volume was 233, a decrease from 265 in Q4 2017. However, total transaction value significantly rose by 205.73% to $76.71 billion, and the median deal size increased to $100 million from $50.5 million in Q4 2017.

2 What were some of the most notable software M&A deals in Q4 2018?

Key acquisitions in Q4 2018 included Microsoft acquiring Github for $7.5 billion, IBM acquiring Red Hat Systems for $34 billion, Cisco acquiring Duo for $2.35 billion, and Paypal acquiring Hyperwallet for $0.40 billion.

3 What were the average valuation multiples for software companies in Q4 2018 M&A?

In Q4 2018, the average M&A EV/Revenue multiple for software companies was 5.77X, and the average M&A EV/EBITDA multiple was 26.92X. Strategic acquirers paid an average of 7.2X EV/Revenue multiple.

4 Where can I access the full Q4 2018 Software M&A Update and Report?

You can download the complete report directly from the Solganick & Co. website. A link to the "Solganick Co Software MnA Update Report Q4 2018" is provided within the article content for full access.