2016 Key Highlights

  • The industry’s largest transaction in 2016 was Hewlett Packard Enterprise’s (HPE) announced spinoff of its software business and the merger of those assets with Micro Focus International for $8.73 billion.
  • Eight of the top ten highest value transactions during the year were completed by strategic acquirers.
  • The only Infrastructure deal in the top ten list of highest value transactions was Symantec’s acquisition of Blue Coat in the cyber-security sector for $4.72 billion. Symantec also completed another high profile security deal with the announced acquisition of LifeLock, a provider of identity theft protection products and services for consumers, for $2.36 billion, which just missed inclusion in the top ten list.
  • There were 369 financially sponsored transactions with an aggregate value of $50.43 billion, representing 18 percent of the total volume and 31 percent of the total value, respectively.

2016 Key Trends

  • Total transaction volume in 2016 remained nearly constant over 2015, from 2,065 to 2,064.
  • Total transaction value in 2016 declined by 28 percent over 2015, from $214.01 billion to $153.28 billion. Excluding the Dell-EMC Corporation deal in 2015 for $67.48 billion, value decreased five percent.
  • The median revenue multiple increased from 2.4x in 2015 to 2.8x in 2016. The median EBITDA multiple moved downward from 13.3x in 2015 to 12.5x in 2016.

M&A Market Overview

Berkery Noyes tracked 5,992 Software transactions between 2014 and 2016, of which 1,335 disclosed financial terms, and calculated the aggregate value to be $384.17 billion. Based on known transaction values, we project values of 4,657 undisclosed transactions to be $108.19 billion, totaling $492.36 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 2.6x revenue and 12.6x EBITDA.