Searching for the Competitive Edge
How private equity buyers compare to corporate buyers in terms of priorities, concerns, and behaviors when acquiring software companies.

The year 2016 was a blockbuster for software M&A, with the highest number of transactions since Mergermarket records began in 1999, and overall deal volume close to a record.

Large corporate players like Microsoft, Oracle, and Salesforce spent billions on historic acquisitions. Private equity firms that once eyed the sector warily from afar raised vast sums of fresh capital and charged in, completing more buyouts than ever. Strategic investors have also looked to software investments that offer speed to innovation in increased numbers. 

“We’re seeing historic levels of activity, and volumes continuing to rise,” says Mike Amiot, Senior Director in the Mergers and Acquisitions practice at West Monroe Partners. “There’s a much higher focus on software entities today that help differentiate our clients in their markets or provide them a competitive advantage.”

All this interest has spurred valuations: The tech-laden NASDAQ Composite index, which smashed its dotcom bubble peak in 2015, finished 2016 even higher and continued climbing into early 2017.

Survey data presented in this report indicate this frenzied pace is set to continue.

Read this report to learn: 

  • How private equity buyers compare to corporate buyers in terms of priorities, concerns, and behaviors when acquiring software companies.
  • About trends in due diligence for software targets, including how the uptick in activity is causing shortened processes, and increased concerns over cybersecurity.
  • Valuable lessons and tips from buyers to help avoid common problems and address unforeseen challenges.

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