April 11, 2016 – Solganick & Co. issues its latest software industry M&A update for Q1 2016. The following summarizes the key highlights of the report:
- Despite a broader global M&A slump, activity within Technology remained robust for the first quarter. According to Dealogic, as of March 2016, global Technology M&A stood at $71.4bn with 1,535 deals, the highest YTD level since 2000 and up 53% on 2015 YTD ($46.6bn). It is the second most targeted sector entering 2016, accounting for 12% of global M&A volume and 26% of activity.
- In particular, deal activity within the U.S. software segment increased. 406 deals with a total invested capital of $26.09 bn was recorded for the U.S. Software industry in Q1 2016. This represents a growth of 48.9% in value compared to Q1 2015 (473 deals with total invested capital of $17.52 bn).
- M&A activity within the software segment was led by a few mega transactions this quarter. They include: Microsoft’s acquisition of Xamarin, Resmed’s acquisition of Brightree, Cisco’s acquisition of Jasper Technologies, and Insight Venture Partner’s buyout of Diligent Corporation (see M&A and Buyout Spotlight sections for more details).
- The median Implied Enterprise Value/Revenue and Implied Enterprise Value/EBITDA for the U.S. Software Industry stood at 3.4x and 11.3x respectively.
- Even as the global M&A landscape experiences a gradual cool down and deals re-balance towards a more sustainable level, we expect deal activity within Technology, particularly Software, to remain robust. In the Software segment, we have identified two key technological trends that are expected to drive consolidation and/or acquisitions: the emergence of the Internet of Things (IoT) and Cognitive Technologies or Artificial Intelligence (AI).
You can read more and download the complete report here: Solganick Co Software MnA Update (Q1 2016) – Final
Solganick & Co. is a leading boutique investment banking and M&A advisory firm focused exclusively on the software, IT services and digital media industry sectors. For more information, go to: solganick.com