M&A Remained Robust
Mergers and acquisitions in the software sector have remained robust, driven by strong demand across key verticals like cybersecurity, financial applications, DevOps, data management, and analytics. In Q1 2025, M&A activity in the SaaS sector improved both sequentially and year-over-year, with large private equity acquisitions such as Smartsheet, SolarWinds, and Zuora. The sector remains attractive for private equity firms, with a focus on AI, data analytics, and cybersecurity expected to drive future deals.
Highlights from the report:
- The number of SaaS mergers and acquisitions reached a 13-quarter high in Q1 2025, with 308 deals announced.
- Private strategic buyers continue to account for the bulk of North American SaaS M&A deals, followed by public buyers and financial sponsors.
- The total implied value of deals led by financial sponsors has steadily increased the last few years, and Q1 2025 marked an eight-quarter high for deal value.
- Multiples for middle market SaaS transactions expanded for a second consecutive quarter in Q1 2025 despite broader macro weakness.
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