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Q3 2021 Private Equity Industry Trends
Q3 2021 Key Highlights
The Information Industry’s largest sponsored transaction in Q3 2021 occurred in the Healthcare vertical. Along these lines was Nordic Capital and Insight Venture Partners’ announced acquisition of Inovalon, a provider of cloud-based platforms supporting data-driven healthcare, for $7.3 billion.
In the Education vertical, the most active overall acquirer through the 1st 3 Quarters of 2021, either directly or through an affiliated business, was Leeds Equity Partners with eight industry transactions. Four of these deals were focused on early childhood education, three were licensing and certification training companies focused on the financial sector, and one was a school that serves students in grades 6-12.
Q3 2021 Key Trends
Total transaction volume in the 1st 3 Quarters of 2021 increased by 33 percent over the 1st 3 Quarters of 2020, from 622 to 825.
Total transaction value in the 1st 3 Quarters of 2021 more than doubled over the 1st 3 Quarters of 2020, from $51.5 billion to $127.2 billion.
Multiples & Value Trends
The median revenue multiple on a year-over-year basis rose by 38 percent, from 3.2x to 4.4x. Disclosed median enterprise value multiples from 2018 to 2021 on a 1st 3 Quarters basis were 3.3x revenue and 15.2x EBITDA.
Top Ten Deals Through Q3 2021
The top ten deals by value have seen five new additions since our half year report, including two by Thoma Bravo: the acquisition of Medallia, an experience management company that leverages proprietary AI to help companies better understand their customers and employees, for $5.9 billion; and Stamps.com, a provider of e-commerce shipping software solutions, for $5.6 billion.
These five transactions, with an aggregate value of $28.3 billion, represented 22 percent of transaction value in the 1st 3 Quarters of 2021 and 59 percent of Q3 2021 transaction value.