NEW YORK — July 1, 2021 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2021 mergers and acquisitions trend report for the Software Industry. The report analyzes M&A activity during the first half of 2021 and compares it with the four previous six-month periods from 2019 to 2020.
Total deal volume in first half 2021 increased 22 percent over second half 2020. Aggregate value gained 25 percent, from $153 billion to $191.09 billion. The median revenue multiple rose from 3.7x to 5.4x while the median EBITDA multiple fell from 18.1x to 12.2x, which was in line with its first half 2020 level.
The segment with the largest rise in volume in first half 2021 over second half 2020 was Niche Software, which is targeted to specific vertical markets, with a 26 percent improvement.
Of note, three of the overall industry’s top five largest deals year-to-date were healthcare related. Along these lines Microsoft announced its acquisition of Nuance Communications, a cloud-based speech recognition and conversational AI company used by healthcare providers and others as Microsoft looks to accelerate its healthcare cloud strategy, for $19.7 billion; Optum announced its merger with Change Healthcare Corporation, which provides software and data analytics, technology-enabled services, and revenue cycle management offerings. for $13.44 billion; and Datavant announced its merger with CIOX Health, a clinical data network, for $7 billion.
Transaction volume in the Business Software segment rose 24 percent in first half 2021. Notable segment transactions during the half year period included Thoma Bravo’s announced acquisition of Talend, a data integration and integrity company, for $2.56 billion; and Bill.com’s announced acquisition of Divvy, an expense management and business budgeting software solution, for $2.5 billion.
A copy of the SOFTWARE INDUSTRY M&A REPORT FOR HALF YEAR 2021 is available at the Berkery Noyes website.