Wednesday, April 01, 2015
Q1 2015 Software Industry Trends Report
Software transaction volume experienced an uptick over the past three months, from 460 to 464. Deal value rose 21 percent, from $18.7 billion in Q4 2014 to $22.6 billion in Q1 2015. The top ten largest transactions accounted for 42 percent of the industry’s total value in Q1 2015, as opposed to 64 percent in Q1 2014.
Deal volume in the Niche Software segment, which is targeted to specific vertical markets, increased 12 percent during Q1 2015. Five of the overall industry’s top ten highest value deals occurred in the segment.
Of note, four of these five transactions were located in the Finance vertical. This consisted of SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management software, for $2.7 billion; Davis + Henderson’s acquisition of FundTech, a payments and transaction banking software company, for $1.3 billion; Bridgepoint’s acquisition eFront SA, which offers software solutions focused on alternative investments and risk management, for $327 million; and PayPal’s acquisition of Paydiant, a cloud-based payment processor, for $280 million.
The Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a five percent decrease in transaction volume throughout the past three months. This followed a 14 percent rise in Q4 2014, its highest point over the last five quarters.
Infrastructure Software volume declined 11 percent in Q1 2015. However, this marked a 31 percent gain relative to Q1 2014. The overall industry’s largest deal year-to-date was Bain Capital’s acquisition of enterprise security business Blue Coat Systems for $2.4 billion. This was the only Infrastructure deal in the list of top ten largest transactions during the quarter. An investor group led by Thoma Bravo previously took Blue Coat private in 2011 for $1.1 billion.