SaaS M&A
Q12017
SEG SNAPSHOT
22
Recent SEG SaaS TransactionsBroad Network of
SaaS Buyers
Software Equity Group (SEG) provides unparalleled M&A advisory
services for emerging and established software companies. By
focusing exclusively on this underserved market segment for over
25 years, we have the knowledge and experience to quickly
determine clients’ business value drivers, position them well
among our deep network of industry buyers and investors, and
aggressively negotiate top-tier valuations. These skills together
with our commitment to excellence results in exceptional
outcomes for our clients’ shareholders, employees and customers.
established software companies.
focused private equity investors that look to provide
shareholder liquidity and growth capital to established software
companies.
large private software companies.
owners preparing for a future liquidity event, whether that be
months or years down the road.
Services
Please contact Kris Beible at
kbeible@softwareequity for more information
SUMMARY
Q12017 SaaS M&A Industry Trends
599reported softwareM&A transactions
in 1Q17. The quartermarks the tenth consecutive quarter in
which transaction volume surpassed 500 deals. In
comparison, the average number of transactions was 568
over the past ten quarters.
206SaaS deals in 1Q17. This was a 14.4%
increase from 1Q16’s 180 deals.SEG estimates 2017 SaaS
deal activity will approach 900 transactions.
4.2x TTM EV/Revenue multiple reached in 1Q17. This
was up 10.5% last quarter’s 3.8x multiple, and only down
slightly from 1Q16’s peak 4.6x medianmultiple.
39 transactions out of 206 were in the CRM &
Marketingproduct category, making this the highest
deal activity out of all product categories. This category has
the 6thhighest EV/Revenue over the past three years, with a
TTM multiple of 3.3x.
36% of the quarter&39;s transactions were strategic deals
backed by private equity backed software companies.
9SaaS companies were purchased by Oracle over the
last 12 months, making them the most active buyer. These
acquisitions support Oracle’s cloud strategy and bolsters
their market position to better compete with SAP,
Salesforce and Microsoft’s aggressive cloud strategies.Copyright2017 by SEG Capital Advisors, LLC. All Rights ReservedThere were 599 reported Software deals in 1Q17, which consist of all SaaS, on
premise,internet and mobile deals; Up from last quarter’s 593 deals.
On a TTM basis, average quarterly deal volume for all software industry M&A
transactions reached an all time high in 1Q17. Since bottoming out in 3Q09,
software industry deal volume has exhibited a very bullish trend.
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Software Industry M&A Deal Volume & SpendRolling Average Deal Volume –Last 4 Quarters
Q12017 SaaS M&A Highlights
since 2010, reaching an all-time high in 2016 with 762
M&A deals.
increase over1Q16&39;s 180 deals.
approach900 transactions, and account for close to 40%
of all software transactions.
transactionsin1Q17.
Top SaaS Product Categories by Number of Deals
(1Q17)Copyright2017 by SEG Capital Advisors, LLC. All Rights Reserved
39
31
23
150.0%
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SaaS Deal Volume
Q1Q2Q3Q4Percent of Total Software M&A Deals
SEG 2017
Estimate
CRM & Marketing
Communications & Collaboration
Analytics & Business
Intelligence (BI)
HR & Talent
Management
Security
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