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Software M&A Update, Q3 2021

Software M&A Update, Q3 2021 - Solganick & Co.

January 4, 2022 – Solganick & Co. has issued its latest Software M&A Update for Q3 2021.

The following provides a summary of the report:

With impressive Q1 and Q2, software M&A activity remains strong in Q3 2021.

Aggregate software industry M&A volume continues to reach new heights, as the third quarter of 2021 posted a record 884 transactions. For context, until late 2020, aggregate software industry deal volume had yet to eclipse 700 transactions in the past five quarters.

Top 4 M&A transactions in the third quarter constituted ~50% of the cumulative transaction value of the total 884 transactions reporting $62.8 billion

  • Intuit’s $12.0 billion acquisition of The Rocket Science Group
  • NortonLifeLock’s $8.0 billion acquisition of Avast
  • Thoma Bravo’s $7.0 billion acquisition of Medallia
  • Clearlake Capital’s $4.9 billion acquisition of Cornerstone

Certain subsectors are particularly well-positioned to succeed in 2022 and post-pandemic including:

Communications and connectivity-focused companies have benefitted from the sudden shift to remote work and education, a trend that is anticipated to persist longer-term given widespread adoption.

SaaS-based business models are continuing to be highly resilient and sought-after.

Notable software transactions included:

  • Hexagon’s $2.7 billion acquisition of Global Enterprise Asset Management (EAM) Business of Infor
  • Moody’s $1.9 billion acquisition of Risk Management Solutions
  • Pegasus Corp One’s $1.9 billion acquisition of Mailgun Technologies
  • Equifax Workforce Solutions’ $1.8 billion acquisition of Appriss
  • Vista Equity Partners’ $1.5 billion acquisition of Blue Prism

IPO and financing activity during the quarter was extremely robust

Krafton, Robinhood Markets and Zomato entered the public marketplace with over $60 billion in combined market capitalization

The most active private equity investor was Thoma Bravo

You can download the complete report here: Software M&A Update Report Q3 2021

About Solganick & Co.

Solganick & Co. is a data-driven investment bank and M&A advisory firm focused exclusively on the software and tech-enabled services industry sectors. For more information on the firm’s software M&A practice, go here: Software

To inquire about a software M&A transaction, please email us: [email protected]

Frequently Asked Questions

1 What was the overall trend in software M&A activity during Q3 2021?

Software M&A activity remained strong in Q3 2021, reaching new heights with a record 884 transactions. This volume significantly surpassed previous quarters, indicating a robust and active market for mergers and acquisitions in the software industry.

2 Which were the largest software M&A transactions reported in Q3 2021?

The top four M&A transactions in Q3 2021 constituted approximately 50% of the cumulative transaction value, totaling $62.8 billion. Notable deals included Intuit's $12.0 billion acquisition of The Rocket Science Group, NortonLifeLock's $8.0 billion acquisition of Avast, Thoma Bravo's $7.0 billion acquisition of Medallia, and Clearlake Capital's $4.9 billion acquisition of Cornerstone.

3 Which software subsectors are expected to perform well in 2022 and beyond?

Certain subsectors are particularly well-positioned for success in 2022 and post-pandemic. These include communications and connectivity-focused companies, which have benefited from the shift to remote work, and SaaS-based business models, which continue to be highly resilient and sought-after.

4 Does the report cover IPO and financing activity in Q3 2021?

Yes, the report briefly mentions that IPO and financing activity during Q3 2021 was extremely robust. It highlights companies like Krafton, Robinhood Markets, and Zomato entering the public market during this period.