M&A Market Dynamics – Software & Technology
- The fourth quarter of 2022 saw a further decrease in both deal volume and deal value in the software sector compared to the third quarter, with 582 transactions in the quarter combining for $36.3B in value.
- On a full-year basis, software deal volume in 2022 was up 11.1% compared to 2021 while total value was down 5.1%. Average deal size also declined which indicates there were fewer large deals coupled with cooling valuations.
- The outlook for tech M&A in 2023 remains uncertain, but many within the industry believe activity will pick up, though valuations are not expected to follow suit. A survey conducted by 451 Research, which consisted of constituents in the tech M&A community, revealed that 46% of respondents anticipated an increase in M&A activity while 66% expected a decrease in valuations relative to 2022.
