1st Half 2022 Software Industry Trends

1ST HALF 2022 KEY HIGHLIGHTS

The largest transaction in 1st Half 2022 was Broadcom’s announced acquisition of VMware, a virtualization and cloud computing technology company, for $70.36 billion.

Five of the top ten highest value deals year-to-date were completed by private equity firms.

There were 292 financially sponsored transactions with an aggregate value of $91.88 billion, representing 22 percent of the total volume and 26 percent of the total value, respectively.

1ST HALF 2022 KEY TRENDS

Total transaction volume in 1st Half 2022 declined by four percent over 2nd Half 2021, from 1,368 to 1,314.

In terms of acquirer type, strategic volume rose two percent on a half year basis, from 1,002 to 1,023. Private equity volume fell 20 percent, from 366 to 293.

Total transaction value in 1st Half 2022 gained 67 percent over 2nd Half 2021, from $212.12 billion to $353.37 billion.

The median revenue multiple decreased from 5.0x in 2nd Half 2021 to 3.8x in 1st Half 2022. After more than doubling from 13.1x in 1st Half 2021 to 27.6x in 2nd Half 2021, the median EBITDA multiple dropped to 16.7x in 1st Half 2022.

M&A MARKET OVERVIEW

Berkery Noyes tracked 6,467 Software transactions between 2020 and 1st Half 2022, of which 1,259 disclosed financial terms, and calculated the aggregate transaction value to be 762.90 billion. Based on known transaction values, we project values of 5,208 undisclosed transactions to be $190.47 billion, totaling $953.37 billion worth of transactions tracked over the past two and a half years.

Transactions from 1st Half 2020 to 1st Half 2022 with enterprise values above $160 million received a median revenue multiple of 7.2x, whereas those in the $10-$20 million range garnered a median revenue multiple of 2.9x.

Disclosed median enterprise value multiples for all segments combined in this report during the last 30 months were 4.1x revenue and 16.9x EBITDA.