2022 Key Highlights

The first half of 2022 saw one of the most expensive acquisitions ever within the gaming industry; the buyout of Activision Blizzard by Microsoft. With the acquisition, Microsoft became the second-largest gaming company in the world, behind Sony.

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

There were 563 financially sponsored transactions with an aggregate value of $172.85 billion, representing 26 percent of the total volume and 38 percent of the total value, respectively.

2022 Key Trends

Total transaction volume in 2022 decreased by 16 percent over 2021, from 2,878 to 2,421.

Total transaction 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 segment with the largest rise in value in 2022 over 2021 was Consumer Software, from $25.49 billion in 2021 to $138.62 billion in 2022.

M&A Market Overview

Berkery Noyes tracked 7,576 Software transactions between 2020 and 2022, of which 1,432 disclosed financial terms, and calculated the aggregate value to be $842.79 billion. Based on known transaction values, we project values of 6,144 undisclosed transactions to be $210.13 billion, totaling $1,052.91 billion worth of transactions tracked over the past three years.

Disclosed median enterprise value multiples for all segments combined in this report during the last 36 months were 4.0x revenue and 17.1x EBITDA.

Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 2.9x revenue, compared to 7.2x revenue for those in the $160 million and above range.