Healthy Valuations Continue to Create Seller-Friendly Software & Services M&A Market in Q2’18

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The year’s first quarter was one of the most active periods in technology M&A in recent memory, but Q2 saw acquirers adjusting to a very seller-friendly environment. In this seller’s market, hefty valuations seem to be driving down the deal volume for large and small acquisitions alike. PwC reported that the total number of deals decreased 19% from Q2’17 and 17% from Q1’18.

Despite the slower trends this quarter, there were still a handful of megadeals that bolstered total deal value. KKR paid $8.5 billion for BMC Software, its largest purchase in any industry since the Great Recession, and Microsoft acquired GitHub for $7.5 billion. In addition, strategic buyers like Adobe, Trimble, Workday, and AT&T lodged $1-plus billion purchases, while a host of strategic buyers and private equity investors made acquisitions in the $100 million to $1 billion enterprise value range.