NEW YORK — July 1, 2020 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2020 mergers and acquisitions trend report for the Software Industry. The report analyzes M&A activity during the first half of 2020 and compares it with the four previous six-month periods from 2018 to 2019.
Deal volume decreased ten percent over 2nd Half 2019. Aggregate transaction value declined 38 percent, from $80.33 billion to $50.19 billion. The median revenue multiple declined from 3.7x to 3.0x, while the median EBITDA multiple moved downward from 15.3x to 11.2x.
In terms of software used within specific vertical industries or “Niche Software,” volume fell 11 percent on a half year basis. High profile segment transactions in the Finance vertical included Visa’s announced acquisition of Plaid Technologies, which develops and creates API’s for banking data, for $5.3 billion; and SoFi’s announced acquisition of Galileo Financial Technologies, a financial services API and payments platform, for $1.2 billion.
Notable segment transactions in the Healthcare vertical included TelaDoc’s announced acquisition of InTouch Health, a provider of enterprise telehealth solutions for hospitals and health systems, for $600 million; and Change Healthcare Corporation’s acquisition of eRx Networks, which delivers advanced technology solutions for pharmacies, providers, and pharmaceutical companies, for $213 million.
M&A volume in the Consumer segment improved ten percent on a half year basis. Notable Consumer transactions in first half 2020 included Zynga’s acquisition of Peak Games, a mobile gaming company, for $1.8 billion; and Facebook’s announced acquisition of Giphy, an online database and search engine for short looping videos, for $400 million. Meanwhile, activity in the Business segment, which consists of software designed for general business practices and not specific industry markets, saw a 13 percent decrease relative to second half 2019.
Transaction volume in the Infrastructure segment declined eight percent in first half 2020. However, three of the industry’s top five largest deals year-to-date occurred in the segment. Along these lines were Insight Venture Partners’ acquisition of Veeam Software, a cloud-focused backup and disaster recovery services provider, for $5 billion; a Symphony Technology Group led consortium’s announced acquisition of Dell Technologies’ RSA Security business for $2.08 billion; and Advent International and Crosspoint Capital Partners’ announced acquisition of ForeScout Technologies, which develops device visibility, control, and cybersecurity solutions, for $1.72 billion.
A copy of the SOFTWARE INDUSTRY M&A REPORT FOR HALF YEAR 2020 is available at the Berkery Noyes website.