Published on March 4th, 2024
I. Looking Back to Q4 2023 Results
Interest rates remain a leading factor in diminished M&A closing.
Uncertainty over the broader macro environment, concerns on debt availability and lending terms are also factors.
A continued surplus of dry powder and investment firms need to deploy capital is a strong countervailing force.
II. U.S. Middle Market Software M&A Activity
A. Trends:
Number of transactions and total transaction value continued to decline in the 4th quarter 2023 and YoY.
Modest increase in average transaction value compared with the previous quarter and YoY.
B. Reading Between the Lines:
Predictability in company growth will be key to getting deals done in 2024.
More creative earn-outs will come to play as buyers and sellers are trying to close the gap on valuation.
The lesser number of high performing assets continues to garner outsized attention.
C. Top Five Software Transactions - Q4 2023:
Sources: Capital IQ and Pitchbook.
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As a visionary, influential, and trusted leader, Vince Monteparte has more than 25 years of experience managing strategic and transformative enterprise initiatives, across Aerospace, Transportation, Logistics, and Enterprise / SaaS Software. Advising C-suite executives and Boards of Directors, and helping companies grow from start-up to exit.
Vincent Monteparte, Principal
Tel (619) 379-1785
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