1st Half 2024 Software Industry Trends

1ST HALF 2024 KEY HIGHLIGHTS

The largest transaction in 1st Half 2024 was Synopsys’ announced acquisition of Ansys, the global leader in engineering simulation, for $32.6 billion.

There were 276 financially sponsored transactions with an aggregate value of $66 billion, representing 25 percent of the total volume and 41 percent of the total value.

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

1ST HALF 2024 KEY TRENDS

Total transaction volume in 1st Half 2024 increased by 2.6 percent over 2nd Half 2023, from 955 to 980.

In terms of acquirer type, strategic acquirer volume remained constant on a half year basis, from 704 to 705. Private equity acquirer volume increased 10 percent, from 251 to 276.

Total transaction value in 1st Half 2024 increased 46 percent over 2nd Half 2023, from $110.4 billion to $160.8 billion.

The median revenue multiple increased from 2.9x in 2nd Half 2023 to 3.3x in 1st Half 2024. Additionally, the median EBITDA multiple rose to 18.4x in 1st Half 2024 after it had dropped from 14.1x in 1st Half 2023 to 10.7x in 2nd Half 2023.

M&A MARKET OVERVIEW

Berkery Noyes tracked 5,458 Software transactions between 2022 and 1st Half 2024, of which 884 disclosed financial terms, and calculated the aggregate transaction value to be $642.82 billion. Based on known transaction values, we project values of 4,574 undisclosed transactions to be $146.15 billion, totaling $788.97 billion worth of transactions tracked over the past two and a half years.

Transactions from 1st Half 2022 to 1st Half 2024 with enterprise values above $160 million received a median revenue multiple of 6.7x, whereas those in the $10-$20 million range garnered a median revenue multiple of 2.5x.

Disclosed median enterprise value multiples for all segment combined in this report during the last 30 months were 3.44x revenue and 15.10x EBITDA.