Software & Services M&A Activity Starts the Year Strong in Q1’18

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After a relatively slower technology M&A market in 2017, 2018 started off strong, lodging the highest cumulative deal value of any first quarter in years. In our Q4’17 industry report, we discussed the recent tax reform measures and mentioned that we thought they might lead to an expansion in acquisition activity. While macroeconomic factors have made the public markets more volatile than they had been in some time, it appears that acquirers are reaping the benefits of the new policies and in a major way—there were nearly two dozen $1-plus billion technology acquisitions in Q1’18.

Cybersecurity and healthcare IT (HCIT) have been two of the hottest sectors for acquisition activity in recent years, and this quarter was no exception. Deals like Inovalon’s purchase of ABILITY Network ($1.2 billion, 8.9x revenue) and Roche’s acquisition of Flatiron Health ($1.9 billion) are headline deals. Leading industry research reported a total HCIT deal value of $6.1 billion for the quarter, demonstrating strength in the sector. For a deeper dive into two of the most notable cybersecurity deals of the quarter, please refer to the details enclosed within the report.