- 2H 2021 saw 21 deals close at over $1 billion
- Share of private equity buyers in deals increased from 33% in 2019 to 41% in 2021
- The hotel management software vertical has seen a recovery
London, United Kingdom – February 22, 2022. Latest Enterprise Software M&A Report from Hampleton Partners, the global M&A and corporate finance advisory firm for technology companies, reveals deal volume grew 12% in 2020 and 2021, growing from 1,450 deals to 1,629 deals in 2021. The total value of disclosed deals was $114 billion, the second highest on record.
Hampleton’s report also recorded that enterprise software deals are on the rise, with a total of 21 deals closing at over $1 billion in the second half of 2021.
Miro Parizek, Founder, Hampleton Partners
In addition, the half-year saw the median valuation multiples increase sharply: the 30-month revenue multiple rose to 5x, while the corresponding EBITDA multiple rose to 16.3x, which corresponds to the levels before the pandemic.
Miro Parizek, Founder and Principal Partner, Hampleton Partners, said, “The enterprise software M&A market is hot right now, and for many reasons. Strong industry trends continue to support software adoption across the board, driving the demand for enterprise software.
“Furthermore, many software business models provide opportunities for investors focused on both growth and profit. SaaS licensing generates sustainable recurring revenue, and younger, high-growth software companies can branch out into new markets. »
Share of private equity in deals continues to rise
There has been a clear upward trend in the share of private equity led deals in the enterprise software sector. In 2021, around 41% of all transactions were led by a financial buyer, compared to 33% in 2019.
EPs appear to be expanding their reach to include a wider variety of technologies than in 2020 – although their preference for health and education technologies has not diminished. With a hint of $1.3 trillion in dry powder held by private equity funds around the world, Hampleton expects that share to hold or grow in the coming quarters.
Restoring trust in hospitality
Miro Parizek said, “The hospitality industry has been hit hard by the COVID-19 pandemic, so M&A activity in this space has slowed in 2020. In 2021, with the introduction of vaccines and the ‘relaxation of many restrictions, consumer demand for travel and leisure is on the rise. and investor confidence in the hotel and restaurant management software vertical has improved.
In August 2021, ASG, an Alpine Investors portfolio company, acquired ALICE, an all-in-one hotel operations management platform. In December 2021, MCR acquired Optii Solutions, an AI-based hotel operations and housekeeping management SaaS provider.
In another such deal, Agilsys, a SaaS point-of-sale and hotel management company, acquired ResortSuite, a provider of resort and hotel management SaaS and related mobile applications for $25 million.
The future of enterprise software mergers and acquisitions
Miro Parizek continued: “The year 2021 ended with a huge flurry of activity in both volume and value. 2022 has started on an equally bullish trajectory. Financial buyers armed with large amounts of dry powder account for nearly half of all enterprise software mergers and acquisitions. Meanwhile, we have seen prolific acquirers continue their acquisition spree. Both on the side of financial and strategic acquirers, we see no slowdown in these trends in the near future.
Hampleton’s Enterprise Software M&A Report analyzes transactions, trends and activity across Business Intelligence and Customer Analytics; design, test and simulation; Business apps; Information management; infrastructure management and vertical application segments of the industry.
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Note to Editors:
Hampleton Partners’ M&A market reports are compiled using data and information sourced from the 451 Research database (www.451research.com).
About Hampleton Partners
Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for technology-focused companies. Hampleton’s experienced dealmakers have built, bought and sold more than 100 fast-growing technology companies and provide hands-on expertise and unparalleled advice to entrepreneurs and technology companies looking to accelerate their growth and maximize their value.
With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with industry expertise in the following areas: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services.
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