Our 2008 Annual Report is a comprehensive analysis of software industry mergers and acquisitions, initial public offerings and venture capital investments of the past year.  The Annual Report also analyzes public software company financial and stock market performance and identifies key trends affecting the software equity markets in 2008.  And of course, our 2008 Annual Report takes a look at the year ahead, including a forecast of software industry M&A and IPO activity and valuations in 2009, and the underlying economic factors and industry trends. 

 

Additionally, we surveyed of 203 of the largest software companies in North America to gain firsthand insight into their acquisition strategies for 2009.  The detailed answers from many of the movers and shakers in the software industry will surprise you. 

 

The 2008 Software Industry Equity Report includes data, analyses and insight indispensable to software industry entrepreneurs, investors, executives, analysts, investment bankers and professional advisors.

 

• How did public software companies – the most acquisitive buyers of private software companies – perform financially in 2008?  Did any software sectors survive the market’s downward spiral?  How has the economic downturn impacted their M&A mindset, and purchase prices?
• How did median exit valuations vary by software sector (Engineering/PLM, Security, etc.) in 2008?  Looking at 13 different categories, why the spread from 0.7x TTM revenue to 2.8x TTM revenue? 
• Will vertical market software companies remain in demand by enterprise players seeking to penetrate specific SME markets and by larger verticals anxious to consolidate their markets in 2009?  What verticals were most active in 2008?
• Has the bloom come off the SaaS rose?  How did pure play SaaS provider exit multiples compare to software M&A valuations overall in 2008?  How did investors treat public SaaS companies in 2008?  How will a significant reduction in IT spending affect SaaS providers?
• Seventy-eight buyers made two or more software company acquisitions in 2008.  Who were they, what did they acquire, and how much did they pay?
• The percentage of public buyers dropped precipitously in 2H08.  What was the driving factor?  What will private equity firms do with the public software companies they’ve taken private if the IPO market remains closed, revenue growth stalls and leveraged debt payments become unduly burdensome?  Will some PE firms divest while others go bargain hunting?
• What really happened to software M&A valuations and transaction volumes throughout 2008 and what does 2009 hold in store?  Find out directly from those responsible for driving these trends.
• Just how much does median exit valuation vary by size of buyer?  Conversely, do larger private software companies ($20 million + sellers) receive significantly higher multiples than smaller ISVs? 
• How did venture capitalists treat the software industry in 2008?  Are early stage companies attracting more funding?  What were the software IPOs of 2008 and what happened to the pipeline that was once full a year ago?  How did these new entrants close the year?  How will investor confidence and market conditions in 2009 affect the software IPO pipeline?

Software Industry Merger & Acquisition: Analysis of Select Software Transactions