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Enterprise Software M&A Soars ‘Post-Pandemic’ With 1,629 Deals And $114 Billion In Transaction Value, Says Hampleton Partners’ Report

  • 2H 2021 saw 21 transactions closing at over $1bn
  • Private equity buyers’ share of deals grew from 33 per cent in 2019 to 41 per cent in 2021
  • Hospitality management software vertical sector saw upturn

London, UK – 22 February 2022. The latest Enterprise Software M&A report from Hampleton Partners, the international M&A and corporate finance advisory firm for technology companies, reveals that transaction volume grew 12 per cent between 2020 and 2021, from 1,450 deals to 1,629 deals in 2021. Total disclosed transaction value amounted to $114 billion, the second highest on record.

Hampleton’s report also registered that Enterprise Software deals are growing larger, with a total of 21 transactions closing at over $1 billion in the second half of 2021.

Additionally, the half-year saw median valuation multiples increase sharply: the trailing 30-month revenue multiple grew to 5x, while the corresponding EBITDA multiple shot back up to 16.3x, matching pre-pandemic levels.

Miro Parizek, founder and principal partner, Hampleton Partners, said: “The Enterprise Software M&A market is currently on a bull run, and for a host of reasons. Strong sector trends continue to underpin the adoption of software across the board, driving Enterprise Software demand.

“In addition, many software business models offer opportunity for both growth- and profit-focused investors. SaaS licenses deliver sustainable recurring revenues, and younger, high-growth software firms can be spun off into new markets.”

Private equity share of deals continues to rise

There has been a clear, increasing trend in the share of private equity-led deals in the Enterprise Software sector. In 2021 around 41 per cent of all deals were driven by a financial buyer, up from 33 per cent in 2019.

PEs appear to be broadening their reach to include a wider variety of technologies than in 2020 – although their preference for healthcare and education technology has not subsided. With a suspected $1.3 trillion in dry powder held by private equity funds across the world, Hampleton expects this share to hold or grow in the next quarters.

Returning confidence in hospitality

Miro Parizek said: “Hospitality was hit hard by the COVID-19 pandemic, so M&A activity in this field slowed in 2020. In 2021, with the introduction of vaccines and easing of many restrictions, consumer demand for travel and leisure is on the rise and investor confidence in the hotel and restaurant management software vertical sector saw an upturn.”

In August 2021, ASG, a portfolio company of Alpine Investors, acquired ALICE, an all-in-one hospitality operations management platform. In December 2021, MCR Acquired Optii Solutions, a provider of AI-based data-driven hotel operations management and housekeeping SaaS.

In another such deal, Agilsys, a hospitality POS & management SaaS company, acquired ResortSuite, a provider of resort and hotel management SaaS and related mobile applications for $25 million.

The future of Enterprise Software M&A

Miro Parizek continued: “The year 2021 ended with a huge wave of activity both in volume and value. 2022 has begun on a similarly bullish track. Financial buyers armed with large amounts of dry powder account for almost half of all Enterprise Software M&A. Meanwhile, we have seen prolific acquirers pursue their acquisition sprees. On both the financial and strategic acquirer side, we see no slowdown of these trends in the near future.”

Hampleton’s Enterprise Software M&A Report analyses transactions, trends and activity across the Business Intelligence & Customer Analytics; Design, Testing & Simulation; Enterprise Applications; Information Management; Infrastructure Management and Vertical Applications segments of the sector.

Download the full Hampleton Partners’ Enterprise Software M&A Market Report 1H2022:

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