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Trend Reports

2014 Mid Year

 
 

2014 l 1st Half l Trends Report l Software Industry

Tuesday, July 01, 2014

1ST HALF 2014 KEY HIGHLIGHTS

  • The most active strategic acquirer year-to-date was Google Inc. with 11 industry transactions: Appurify, mDialog, Divide, Quest Visual, Inc., StackDriver, Adometry, Inc., Spider.io, SlickLogin, DeepMind, Impermium and BitSpin.
  • There were 153 financially sponsored transactions with an aggregate value of $10.95 billion, representing 17 percent of the total volume and 19 percent of the total value, respectively.

1ST HALF 2014 KEY TRENDS

  • Total transaction volume in 1st Half 2014 increased by six percent over 2nd Half 2013, from 862 to 914.
  • Total transaction value in 1st Half 2014 rose by five percent over 2nd Half 2013, from $54.90 billion to $57.61 billion.
  • The median revenue multiple remained nearly constant at 2.4x.The median EBITDA multiple declined from 10.9x in 2nd Half 2013 to 9.2x in 1st Half 2014.
  • The segment with the largest rise in volume in 1st Half 2014over 2nd Half 2013 was Niche Software, which is targeted to specific vertical industries. Niche Software saw a 13 percent increase, from 408 to 460 transactions.

M&A Market Overview

Berkery Noyes tracked 4,099 Software transactions between 2012 and 1st Half 2014, of which 1,082 disclosed financial terms, and calculated the aggregate transaction value to be $162.91 billion. Based on known transaction values, we project values of 3,017 undisclosed transactions to be $48.51 billion, totaling $211.42 billion worth of transactions tracked over the past two and a half years.

Disclosed median enterprise value multiples for all segments combined in this report during the last 30 months were 2.3x revenue and 11.3x EBITDA.

The most active acquirer between 2012 and 1st Half 2014, either directly or through a partner or affiliated business, was Constellation Software with 45 transactions. The largest of these deals was the acquisition of Total Specific Solutions, a provider of vertical market software, for $330 million in 2nd Half 2013.



 

Transaction Volume/Value & Multiples

Transactional Analysis

Strategic vs. Financial Comparison

Purchaser Analysis

Transaction By Volume Segment

Footnotes