Analyzing the impact and reverberations of the COVID-19 pandemic on SaaS M&A deals
PitchBook is a Morningstar company providing the most comprehensive, most accurate, and hard-to-find data for professionals doing business in the private markets.
Key takeaways:
Enterprise SaaS M&A has stabilized and begun to show early signs of an upward inflection, particularly in deal count, over the past several quarters. Meanwhile, deal value remains restrained by a combination of lower valuations and more limited disclosures.
- PE buyouts and LBOs have been a greater proportion of this recovery in deal count, eclipsing the activity by corporate M&A, which remains restrained even compared to pre-pandemic levels. Our estimated buyout and LBO deal count in Q1 2024, totaling 59 deals, is slightly above the estimated deal counts achieved in the prior peaks of Q4 2020 (56 deals) and Q1 2021 (53 deals), while the number of M&A transactions has fallen to about 20% below pre-pandemic levels.
- Since 2018, the largest portion of enterprise SaaS M&A has been from VC-backed companies (1,342 transactions, 37.5% of the total), which are typically the smallest deals, averaging just $140.5 million per transaction. On the other end of the spectrum is the M&A of PE-backed and publicly held companies, which totaled $360.2 billion and $356.8 billion, respectively, in deal value since 2018, averaging $553.3 million per PE-backed transaction and $980.3 million per publicly held transaction.
- The ERP and CRM segments are overrepresented in both deal value and deal count over the past five years since 2018. Among all M&A transactions since 2018, ERP transactions are 39.6% of total deal value ($415.2 billion) and 38.6% of total deal count (1,382 deals). Similarly, CRM transactions are 26.3% of total deal value ($273.3 billion) and 26.8% of total deal count (959 deals).
Download the PDF to read the entire Whitepaper.
Analyzing the impact and reverberations of the COVID-19 pandemic on SaaS M&A deals
PitchBook is a Morningstar company providing the most comprehensive, most accurate, and hard-to-find data for professionals doing business in the private markets.
Key takeaways:
Enterprise SaaS M&A has stabilized and begun to show early signs of an upward inflection, particularly in deal count, over the past several quarters. Meanwhile, deal value remains restrained by a combination of lower valuations and more limited disclosures.
- PE buyouts and LBOs have been a greater proportion of this recovery in deal count, eclipsing the activity by corporate M&A, which remains restrained even compared to pre-pandemic levels. Our estimated buyout and LBO deal count in Q1 2024, totaling 59 deals, is slightly above the estimated deal counts achieved in the prior peaks of Q4 2020 (56 deals) and Q1 2021 (53 deals), while the number of M&A transactions has fallen to about 20% below pre-pandemic levels.
- Since 2018, the largest portion of enterprise SaaS M&A has been from VC-backed companies (1,342 transactions, 37.5% of the total), which are typically the smallest deals, averaging just $140.5 million per transaction. On the other end of the spectrum is the M&A of PE-backed and publicly held companies, which totaled $360.2 billion and $356.8 billion, respectively, in deal value since 2018, averaging $553.3 million per PE-backed transaction and $980.3 million per publicly held transaction.
- The ERP and CRM segments are overrepresented in both deal value and deal count over the past five years since 2018. Among all M&A transactions since 2018, ERP transactions are 39.6% of total deal value ($415.2 billion) and 38.6% of total deal count (1,382 deals). Similarly, CRM transactions are 26.3% of total deal value ($273.3 billion) and 26.8% of total deal count (959 deals).
Download the PDF to read the entire Whitepaper.
