Full Year 2023 Software Industry Trends

2023 Key Highlights

The highest value deal in 2023 was Cisco’s announced acquisition of Splunk, a cybersecurity and observability leader, for $28.6 billion.

Overall the cybersecurity application sector tallied 81 transactions in 2023. Another notable cybersecurity transaction was Thales’ $3.6 billion acquisition of Imperva from Thoma Bravo.

There were 510 financially sponsored transactions with an aggregate value of $70.46 billion, representing 25 percent of the total volume and 41 percent of the total value, respectively.

2023 Key Trends

Total transaction volume in 2023 decreased by 18 percent over 2022, from 2,450 to 2,014.

Total transaction value in 2023 decreased by 62 percent over 2022 from $453 billion to $172 billion.

The market segment with the highest total value in 2023 was Infrastructure Software with $72.49 billion in transactions.

M&A Market Overview

Berkery Noyes tracked 7,348 Software transactions between 2021 and 2023, of which 1,290 disclosed financial terms, and calculated the aggregate value to be $817.39 billion. Based on known transaction values, we project values of 6,058 undisclosed transactions to be $211.09 billion, totaling $1,028.48 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 4.3x revenue and 17.5x EBITDA.

Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 2.8x revenue, compared to 7.1x revenue for those in the $160 million and above range.