Every month or so, we do a quick wrap-up of the M&A and investment activity that has been occurring in our industry. With the world wracked by economic woes, it would be easy to think nothing much has been going on recently, but plenty has. The biggest deal by far was OpenText closing the deal to buy Microfocus, and we published some analysis last year on this when it was first made public. But beyond that, things have been pretty busy, and below is a list of those we noted through our research work. Yet all these deals need to be seen in the right light, for there is some economic gloom to contend with. The tech sector is seeing the lowest levels of M&A in over a decade, though many expect this to pick up the pace again in 2023.
Furthermore, the tech sector is declining (valuation-wise) faster than many other markets. And according to our friends and former colleagues Brenon Daly and Melissa Incera at SS&P Global Market Intelligence, “The Bid/Ask spread is wider than it has ever been.” Even so, it’s important to remember that the enterprise software market is only a part of the overall tech sector. The broad Information Management and Automation sector is only a tiny part of the enterprise software market. Still, it does appear to represent a glimmer of light in the darkness! Maybe, somewhat surprisingly, the enterprise software market is faring relatively well, with only cyber security outpacing it. There were just short of 2000 deals of enterprise software in 2022, with Private Equity firms playing an outsized role in those deals. Hence there are some solid reasons for optimism moving forward.
As always, please note that this is not a comprehensive list, and we may have missed some along the way, but interesting nonetheless.
Boston-based Progress Software agreed to buy MarkLogic for $335m
ATS Corporation acquired Belgian-based process optimization company IPCOS
OneSpan, the Chicago-based cyber security company, acquired the Australian Blockchain document storage company ProvenDB
Montreal-based Aspire Software (essentially a PE firm) acquired Ottawa-based document management company WorkDynamics
Dutch AI firm Hyarchis acquired nearby neighbors’ accounting process automation vendor DAPAS
Andreessen Horowitz backed Healthcare startup Ciitizen acquired a Health Information Exchange (HIE) platform from Stella Technologies
NASDAQ-traded online learning specialist Healthstream acquired the healthcare information management company eeds (Electronic Education Documentation System)
Helpdesk automation specialist Capacity acquired conversational AI (text/sms) business Textel
Finnish software firm Valmet acquired the Pennsylvania-based industrial automation company NovaTech
And last but certainly not least, M-Files acquired its fellow Finnish-based no-code document automation firm Ment
If you are an investor in enterprise software technology firms, we have a free – yup, free – confidential advisory service for you. A service that means all you have to do is find a time on our calendar.
If you are looking to sell your enterprise technology software business. Again feel free to reach out and chat with us, as we may be able to help by providing some critical but constructive advice and support.