Q3 2020 Key Highlights

The largest transaction in Q3 2020 and year-to-date was Intercontinental Exchange’s announced acquisition of Ellie Mae, a cloud-based platform provider for the mortgage finance industry, for $11 billion. Of note, Thoma Bravo acquired Ellie Mae in 2019 for $3.3 billion.

There were 418 financially sponsored transactions in the 1st 3 Quarters of 2020 with an aggregate value of $39.9 billion, representing 26 percent of the total volume and 35 percent of the total value, respectively.

Q3 2020 Key Trends

Total transaction volume in Q3 2020 increased by 25 percent over Q2 2020, from 459 to 575.

Total transaction value in Q3 2020 more than quadrupled over Q2 2020, from $14.0 billion to $62.8 billion. This was the industry’s peak for value throughout the last seven quarters.

Multiples & Value Trends

The median revenue multiple from 2019 through the 1st 3 Quarters of 2020 declined by 19 percent, from 3.7x to 3.0x. This was the same as its 2018 level.

The median EBITDA multiple from 2019 through the 1st 3 Quarters of 2020 decreased by 16 percent, from 16.0x to 13.5x. This was in line with its 2018 level.

Top Ten Deals Through Q3 2020

The top ten deals by value have seen six new additions since our half year report. This includes four of the top five deals year-to-date. In addition, two of the top three deals occurred in the Finance vertical: the previously mentioned acquisition of Ellie Mae for $11 billion; and Roper Technologies’ acquisition of Vertafore in the property and casualty (“P&C”) insurance lifecycle sector for $5.4 billion.

These six transactions, with an aggregate value of $35.4 billion, represented 31 percent of transaction value in the 1st 3 Quarters of 2020 and 56 percent of Q3 2020 transaction value.