NEW YORK — January 10 , 2023 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2022 mergers and acquisitions trend report for the Software Industry. The report analyzes M&A activity in the Software Industry during 2022 and compares it with data covering 2020 and 2021. 

Total deal volume in 2022 decreased by 16 percent over 2021, from 2,878 to 2,421. Total deal value in 2022 increased by 12 percent over 2021 from $403.21 billion to $452.75 billion. The median revenue multiple decreased from 5.1x in 2021 to 3.7x in 2022. The median EBITDA multiple declined from 18.9x in 2021 to 16.7x in 2022.

The largest deal in 2022 was Broadcom Limited’s announced acquisition of VMware Inc., a cloud computing and virtualization technology company, for $70.36 billion.

The median revenue multiple decreased from 5.1x in 2021 to 3.7x in 2022. The median EBITDA multiple declined from 18.9x in 2021 to 16.7x in 2022. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 2.9x revenue, compared to 4.4x revenue for those in the $20-$80 million range and 7.2x revenue for those in the $160 million and above range.

The number of deals in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, decreased five percent from 2021 to 2022. Notable Business segment transactions during the past year included Thoma Bravo’s announced acquisition of Coupa Software, a cloud-based Business Spend Management (BSM) platform, for $8 billion; Vista Equity Partners’ announced acquisition of KnowBe4, a security awareness training and simulated phishing platform, for $4.6 billion; and PTC’s announced acquisition of ServiceMax a provider of product-centric field service management (FSM) software, for $1.46 billion.

Transaction activity in the “Niche Software” segment, which is targeted to specific vertical markets, decreased 16 percent in 2022. Notable transactions in the segment’s Healthcare vertical included Stryker’s acquisition of Vocera Communication, a provider of clinical communication and workflow solutions, for $2.99 billion; Zebra Technologies’ acquisition of Matrox Imaging, a developer of machine vision components, software and systems for Original Equipment Manufacturers (OEMs) and integrators involved in machine vision, image analysis, and medical imaging industries, for $875 million; and N. Harris Computer Corporation’s acquisition of Allscripts’ Hospitals and Large Physician Practices business segment, for $670 million.

Other notable Niche segment deals during 2022 included Brookfield Business Partners’ announced acquisition of CDK Global Inc., a provider of technology services and software solutions for automotive dealers and manufacturers, for $8.2 billion; and Clearlake Capital Group, L.P. and Motive Partners’ acquisition of the BETA+ assets including BETA Post-trade Processing, Maxit, and Digital Investor, for $1.1 billion.

M&A activity in the Infrastructure Software segment declined 23 percent over the past year. High profile segment deals included Vista and Evergreen’s completion of their previously announced transaction to acquire Citrix Systems, Inc., a provider of software to secure, manage, and monitor diverse technologies in complex cloud environments, for $16.7 billion; and Aptiv’s announced acquisition of Wind River, a provider of software that enables the secure development, deployment, operations and servicing of mission-critical intelligent systems, for $4.3 billion.

A copy of the SOFTWARE INDUSTRY M&A REPORT FOR FULL YEAR 2022 is available at the Berkery Noyes website.