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Software Industry 2009 M&A Trends Show Rising Multiples

Software Industry M&A activity experienced a significant half-to-half gain as exhibited by the 83% increase

Berkery Noyes on Friday released its "2009 Software Industry Merger & Acquisition Trends" report.

According to the report, Software Industry M&A activity experienced a significant half-to-half gain as exhibited by the 83% increase in the median EV/revenue multiple from 1.2 in 1st Half 2009 to 2.2 in 2nd Half 2009.

This rise brings the median EV/revenue multiple back to its 2007 level.

2nd Half 2009 exhibited a moderate increase in both aggregate volume and aggregate value, versus 1st Half 2009. Half-to-half, aggregate value increased by 17% from approximately $18 billion to $21 billion, and aggregate volume increased by 5% from 341 deals to 358.

Year-to-year 2009 exhibited negative growth in both aggregate value and aggregate volume of transactions.

Total transaction volume declined by 16% from 837 deals in 2008 to 699 in 2009.

Aggregate value declined by 16% as well, from $45.43 billion in 2008 to $38.30 in 2009.

Financially sponsored acquisitions took a decreased market share of deal activity, as measured by aggregate value, having had 23% in 2008 and 14% in 2009, a decrease of 37%.

The largest transaction in the Software Industry was Oracle's proposed acquisition of Sun Microsystems, announced April 19, for $7.1 billion.

The aforementioned transaction is more than 2.4x the next largest transaction, Fidelity National Information Services' acquisition of Metavante for $2.9 billion, which closed on October 1.

More Stories By Fuat Kircaali

Fuat Kircaali is the founder and chairman of SYS-CON Media, CloudEXPO, Inc. and DXWorldEXPO, Inc.

Kircaali came to the United States from Zurich University, Switzerland in 1984 while studying for his PhD, to design computer systems for SH-2G submarine hunter helicopters for the U.S. Navy. He later worked at IBM's IS&CG Headquarters as a market research analyst under Mike Armstrong's leadership, an IBM executive who later ran IBM Europe and AT&T; and Fuat was the Director of Information Systems for UWCC, reporting to CEO Steve Silk (later Hebrew National CEO), one of the top marketing geniuses of the past two decades.

Kircaali founded SYS-CON Media in 1994, a privately held tech media company with sales exceeding $200 million. SYS-CON Media was listed three years in a row by Inc 500 and Deloitte and Touche among the fastest-growing private companies in America. Kircaali launched DXWorldEXPO LLC, a Lighthouse Point, FL-based "digital transformation" events company in March 2017.

Fuat completed Bogazici University (ranked among the top 100 universities in the world) Business Administration program in 1982 with a Bachelor's Degree in Istanbul, Turkey. He was one of 50 students accepted to the program out of over 1 million high school graduates.

http://twitter.com/fuatkircaali

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