M&A Market Dynamics – Software & Technology
- The first quarter of 2023 saw a continued decline in deal value while deal volume increased in the software sector compared to the previous quarter, with 704 transactions in the quarter combining for $34.2B in value.
- Compared to Q4 2022, Q1 2023 software deal volume was up 18.1% while total value was down 5.7%. This represents a significant reduction in average deal size, a product of fewer large deals combined with softer valuations.
- The market for tech M&A in 2023 remains unstable, especially in light of the recent banking turmoil. Previously surveyed industry constituents from 451 Research anticipated an uptick in deal activity, albeit at lower valuations. That is the trend that played out in Q1 2023, but the remainder of the year may be even more unpredictable as both buyers and lenders exhibit extra caution.
