Los Angeles, CA – Leading technology-focused investment banking firm, Solganick & Co., has issued its latest Software M&A Update for H1 2018. It covers recent mergers and acquisitions activity within the software sector in the U.S. and global.
Solganick & Co.'s Software M&A Update for H1 2018 revealed a three percent decline in total software M&A transaction volume compared to H2 2017, decreasing from 1,084 to 1,056 transactions. Despite this, total transaction value significantly rose by 46 percent in H1 2018, reaching $84.43 billion from $57.88 billion in H2 2017. The report indicated that the median revenue multiple for SaaS-based software firms was 4.5x in Q2 2018, a slight decrease from 4.7x in Q2 2017, while the median EBITDA multiple fell from 13.7x to 11.4x. eCommerce software and SaaS led all other product sectors with a median valuation of 7.2x EV/Revenue over the last three years, with healthcare software and SaaS announcing the highest number of M&A transactions in Q2 2018 at 21%.
The following summarizes the report, which can be accessed and downloaded here: Solganick and Co – Software MnA Update H1 2018
Total software M&A transaction volume in 1st Half 2018 declined by three percent over 2nd Half 2017, from 1,084 to 1,056.
Total transaction value in 1st Half 2018 rose by 46 percent over 2nd Half 2017, from $57.88 billion to $84.43 billion.
The median revenue multiple for SaaS-based software firms is 4.5x for Q2 2018 versus 4.7x for the same period last year, Q2 2017. The median EBITDA multiple
decreased during this timeframe, from 13.7x to 11.4x.
The largest deal in 1st Half 2018 was KKR’s announced acquisition of BMC Software for $8.5 billion.
Transactions from 1st Half 2016 to 1st Half 2018 with enterprise values above $160 million received a median revenue multiple of 4.0x, whereas those in the $20-160 million range garnered a median revenue multiple of 2.7x and those in the $10-$20 million range had a median revenue multiple of 2.0x.
- Median EV/Revenue Multiple: 4.5x
- Median EV/EBITDA Multiple: 13.4x
eCommerce software and SaaS outpaced all other software product sectors in terms of median EV/Revenue multiples for the last 3 years coming in at a median valuation of 7.2x EV/Revenue.
Deals include Square’s acquisition of Weebly for 7.2x EV/Revenue and Adobe’s acquisition of Magento for 11.2x EV/Revenue.
Healthcare software and SaaS announced the greatest number of M&A transactions, at 21%, in Q2 2018, followed by the financial services and real estate verticals, tied at 13%.
For more information or to download a free copy of the report, go here: https://solganick.com/wp-content/uploads/2018/08/Solganick-Software-Q2-2018-Final.pdf
Solganick & Co. provides investment banking and M&A advisory services to fast growth and established software and tech-enabled services companies. For more information go here: solganick.com
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