The Software Equity Group has published their second quarter 2019 SaaS M&A update.  You can download the entire report here (free, email registration required).  As usual it contains a ton of valuable information. 

Highlights

  • The SaaS M&A market continued to roar, as each of the past four quarters posted above 250 transactions. Valuations remained strong, as 2Q19 posted a median of 4.6x EV/Revenue, a high point for the SaaS M&A market.
  • The composition of SaaS targets indicated that the majority of companies were not VC funded (60% of targets), based in North America (76% of targets), and SMBs with less than 150 employees (59%).
  • CRM & Marketing deal volume increased approximately 27%, posting 47 deals in 2Q19, compared to 1Q19’s 37 deals.
  • Healthcare, Real Estate, and Education were the most active verticals over the past three years.
  • Select notable Healthcare transactions include The Riverside Company’s acquisition of emaTerra

Enterprise Value/Revenue Multiples

Revenue multiples remain high with a median multiple of 4.6x.  The trend of subscale revenue companies trading at a discount to $100M enterprises continues

Life Span Before Acquisition

SEG Report

Other Contents

The report contains a lot of other valuable content including transaction count by industry, three year valuation trends, deal count by product category/vertical, deal count by business model, del count by buyer and target backing, M&A activity by region, and a listing of the 250+ transactions that closed in Q2.

Once again, here is the link to the full report.


Also published on Medium.