M&ASEG Snapshot: 3Q21 SaaS M&A Update

SEG’s 3Q21 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.

Highlights:

• Aggregate software industry M&A volume continues to reach new heights, as the third quarter of 2021 posted a record 933 transactions. For context, until late 2019, aggregate software industry deal volume had yet to eclipse 700 transactions.
• Equally impressive and unsurprisingly, SaaS M&A deal volume also set a new record. 3Q21’s 498 SaaS M&A deals surpassed the previous record of 425 deals (4Q20) by approximately 17%.
• Record demand for SaaS businesses has also driven up M&A multiples considerably in recent quarters, culminating in an astounding 8.0x EV/Revenue multiple in 3Q21.
• Private equity firms continued to drive a majority of SaaS M&A activity and accounted for 55% of deals in 3Q21.
• The quarter included several mega transactions, including Afterpay’s acquisition by Square ($28.6B, 42.7x EV/Revenue), Medallia’s acquisition by Thoma Bravo ($6.1B, 12.3x EV/Revenue), Cornerstone OnDemand’s acquisition by Clearlake Capital Group ($5.2B, 6.3x EV/Revenue), and Frame.io’s acquisition by Adobe ($1.3B).