M&ASEG Snapshot: 2Q20 SaaS M&A Update

SEG’s 2Q20 SaaS M&A update is a snapshot of M&A deal activity across the software industry. The report includes historical deal volume by product category and vertical, valuation stats, most active buyers, notable deals, private equity activity, and more.

Download the SEG Snapshot: 2Q20 SaaS M&A Update

Overall software M&A deal volume (including SaaS, on-premise, mobile, and internet deals) was impacted by COVID-19 and the resulting market downturn, decreasing nearly 20% QOQ.

SaaS M&A deal volume declined 30% QOQ, posting 207 deals in 2Q20. Further, we expect to see annual deal volume decrease for the first time in 2020.

On a monthly basis, SaaS M&A deal volume hit a low point in May. Signs of recovery showed in June and we expect to see the rebound continue through July and August.

SaaS M&A valuation multiples typically lag public market multiples and has not yet shown the influence by COVID-19. The median SaaS M&A multiple was in line with prior quarters (4.7x EV/Revenue).

Strategic and private equity driven deals made up an equal share of acquisition activity in 2Q20. Highly acquisitive buyers include VMware, Volaris Group, MRI Software, Microsoft, and Thoma Bravo.