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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Sameer Pal (1)

    Monday
    May012017

    SOFTWARE DEAL VOLUME AND VALUE BOTH ON THE RISE

    Berkery Noyes’ Software report for Q1 2017 showed that transaction volume experienced a 16 percent gain over the past three months, with a total of 528 acquisitions in Q1 2017. Overall value rose 75 percent, from $29.4 billion to $51.4 billion. The number of deals throughout the past five quarters reached its peak in Q2 2016, whereas value reached its zenith in Q3 2016.

    Deal volume in the “Niche Software” segment, which is targeted to specific vertical markets, increased 14 percent in Q1 2017. The Niche segment accounted for four of the overall industry’s top ten highest value deals year-to-date. The largest of these transactions was Intel’s announced acquisition of Mobileye, which develops self-driving technologies, for $14.7 billion. The Mobileye acquisition follows several related transactions in 2016 by high profile acquirers such as Uber, General Motors, and Ford.

    Other notable Niche segment deals year-to-date included Vista Equity Partners’ announced acquisition of DH Corporation, a provider of technology solutions to financial institutions, for $3.6 billion, which Vista plans to combine with its portfolio company Misys; McKesson Corporation’s announced acquisition of CoverMyMeds, which offers electronic prior authorization solutions to pharmacies, providers, payers and pharmaceutical manufacturers, for $900 million; and Hexagon’s announced acquisition of MSC Software, a provider of computer-aided engineering (CAE) solutions such as simulation software for manufacturing process development, for $834 million.

    The Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a 29 percent quarterly increase in volume. The Business segment’s highest value deal in Q1 2017 was Blackstone Group’s announced acquisition of Aon’s technology-enabled and human resources platform for $4.3 billion.

    Other notable Business segment deals year-to-date included Atlassian’s acquisition of Trello, a web-based collaboration software and project management service, for $425 million; and Wolters Kluwer Tax & Accounting’s announced acquisition of Tagetik, which provides corporate performance management solutions and services to mid and large sized corporations, for $317 million.

    “No matter the business the human capital element exists, thus acquirers across a wide spectrum are showing strong interest in workforce management, recruiting, training, performance reporting, compensation and other functions,” said Sameer Pal, Managing Director at Berkery Noyes. “Employers increasingly recognize there are enormous direct and indirect costs to turnover and addressing that spans the entire employee lifecycle. Technology enablement around the critical needs of finding, hiring, and retaining qualified personnel allows companies to deal with these areas holistically.” Pal continued, “Additionally, given the ongoing proclivity for organizations to distribute their work forces, continued outsourcing of functions and business processes, and the progress being made in supporting technology areas, knowledge management and collaboration platforms are becoming even more prolific.”