May 2, 2019 – Solganick & Co. has issued its latest software Mergers and Acquisitions (M&A) update for Q1 2019. The following summarizes the report:
Solganick & Co.'s Q1 2019 Software M&A Update reported that the M&A value for software reached $73.75 billion across 552 deals. Software transactions constituted 43% of all M&A activity in Q1 2019, marking an increase from 36% in the same period last year. The SaaS M&A market experienced a significant boom, achieving an all-time quarterly record of 277 deals, with valuations remaining high at a median of 4.5x EV/Revenue. Private Equity firms, including Vista Equity Partners and Thoma Bravo, were particularly active acquirers in the software sector during this quarter.
The M&A value for software in Q1, 2019 was $73.75 bn and the number of deals closed was 552. Software accounted for 43% of the total M&A transactions in Q1 2019 compared to 36% of all transactions last year during the same period.
The median deal size in the Software industry was $87 mn in Q1, 2019. The broader software industry M&A’s upward trend continued in Q1 2019. In particular, the SaaS M&A market boomed, reaching an all-time quarterly record of 277 deals. SaaS valuations for Q1 2019 remained high at a multiple of 4.5x EV/Revenue.
About a third of transactions in Q1 2019 had a revenue multiple greater than 6.0x EV/Revenue. Highest median revenue multiple of 5.3x EV/Revenue was posted by targets with revenue of $50-$100M, while targets with revenue of $100M or greater posted the second highest revenue multiple of 5.0x EV/Revenue.
Private Equity buyers remain an active acquirer of SaaS companies. The most active software buyers were Vista Equity Partners, Insight Venture Partners, TA Associates, Providence Equity Partners, Thoma Bravo, Genstar Capital, Accel-KKR, and HG.
You can download the full report here: https://solganick.com/wp-content/uploads/2019/05/Solganick-Co-Software-MA-Update-Q1-2019.pdf
For more information or to inquire about a software M&A transaction, please contact us.