Buyers Target Videoconferencing, Healthtech and Supply Chain Logistics In More Regional Enterprise Software M&A Market

• Enterprise Software volumes broadly unscathed, with transaction volume dropping only five per cent in first half of 2020 vs. second half 2019
• Valuation multiples beginning to decline: 16.7x trailing 30-month median EBITDA multiple vs. 17.3x in second half of 2019
• More regional deal-making in Enterprise Software M&A market as travel restrictions and local lockdown measures impact intercontinental M&A
 

London, UK – 1 September 2020.The first post Covid-19 Enterprise Software M&A market report from Hampleton Partners, the international technology mergers and acquisitions advisor, reveals that transaction volumes dropped by five per cent, with 602 deals recorded in the first half of 2020 compared to 631 deals in the second half of 2019.

Hampleton’s report did register $34 billion worth in disclosed transaction value, however, with a handful of blockbuster billion- and nine-digit deals, including Visa’s $5.3 billion acquisition of Plaid and Salesforce’s $1.3 billion acquisition of Vlocity.  

Contrary to previous quarters, in Q2 2020, 61 per cent of European targets were bought by acquirers that were also European, pointing to more regional deal-making this year.

Miro Parizek, founder, Hampleton Partners, said:

“M&A in the Enterprise Software sector remained steady in the first half of 2020. Deal volume was in line with the recent past, while we witnessed the initial indication of a downward adjustment to valuations.

“Beyond this, Covid-19 is re-shaping the Enterprise Software M&A market. Both private equity and strategic buyers are focusing their sights on companies helping to improve communications, streamline processes or facilitate remote working capabilities; businesses that help fuel the e-commerce boom, like supply chain logistics software critical for improving last-mile fulfilment; and, of course, healthcare software.

“Looking forward, we anticipate robust M&A activity as PE investors and established strategics jockey for position in the new, post-pandemic, business environment.”

In April, telecommunications company Verizon acquired BlueJeans, an American provider of videoconferencing, webinar and online event management SaaS, for $400 billion at 4x revenue. The software can integrate with existing systems and is accessible through multiple web browser platforms and on mobile devices.

In March 2020, private equity firm Marlin acquired Lifesize, a provider of 4K video conferencing SaaS which allows users to host free video and audio calls instantly via a share link to their teams, for an undisclosed sum.

Healthtech dominated the vertical software segment in 1H2020.  

In February, CompuGroup Medical, a German healthcare information management SaaS, acquired the German and Spanish assets of Cerner Corp. Cerner provides healthcare practice management software and SaaS which has features for billing, EHR (electronic health records) management and electronic data interchange (EDI). The acquisition closed at $249 million, at 3x Cerner’s revenue and 17.1x its EBITDA.

The digitalisation of healthcare is continuing to accelerate the growth of data volumes. With more data, healthcare players need new and improved tools in artificial intelligence (AI), machine learning (ML) and predictive and prescriptive analytics to comb through this massive pool of data.

“We’ve seen the number of AI targets rise exponentially as the early movers and pioneers of this space are becoming ripe for sale,” says Parizek.

In 1H2020, American genetic testing services provider Invitae made two acquisitions in this space. In the first, it acquired Diploid, a Belgian AI-based genetic disorder sequencing SaaS, for $95 million.

In a second acquisition, Invitae acquired YouScript for $79.3 million. The target, a four-year old American startup, provides prescription medication management and analytics SaaS to healthcare providers. Its software includes features for analysing patients’ genetic data with clinical knowledge on drug metabolism to help predict which prescription medications will work best.

In January, WiseTech Global, the ASX-listed company specialising in logistic management SaaS acquired SISA Studio, a near 50 year-old Swiss provider of customs clearance and freight forwarding SaaS which includes document and warehouse management features.

Meanwhile, Valsoft a Montreal-based vertical investor, acquired the Belgian assets of Navitrans which provides logistics and warehousing management SaaS, enabling management of land, sea and air freight forwarding, associated documentation and integrated logistics.

Jane Henry
Email: jane@marylebonemarketing.com
Mob: +44 789 666 8155
www.marylebonemarketing.com 

Note to editors
Hampleton Partners’ Enterprise Software M&A Market Report 2H 2020 is compiled using data and information from the 451 Research database (www.451research.com). For more information on this or anything else related to our research, please email the address provided below.

Download the full Hampleton Partners’ Enterprise Software M&A Market Report 2H2020: https://www.hampletonpartners.com/reports/enterprise-software-report/.

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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