Palo Alto – September 15, 2022 – Woodside Capital Partners (WCP) is pleased to share our Tech M&A September 2022 Newsletter.
Key areas covered include:
- Software M&A deal volume and total deal dollar value have followed economic trends in the general economy and in the venture ecosystem.
- The first half of 2022 saw deals proceeding at a very healthy clip compared to 2021. Private equity alone completed more than $500 billion in deals in the first half, and dry powder in PE funds grew compared to 2021, eclipsing $3.6 trillion.
- The current economy is affecting different parts of the tech sector differently. Consumer spending and outlays on discretionary items — those that are short-term or non-essential — has declined. But corporate demand is robust, especially for infrastructure and equipment such as data centers, communications networks and industrial applications.
- Despite economic challenges, a total of 501, 436, and 424 software M&A transactions were completed in June, July and August 2022 respectively. As seen in previous economic downturns, buyers and sellers continue to come together. The great challenge is finding pricing that is acceptable to all, given that sellers tend to persist looking at last year’s valuations (which were higher), and buyers tend to look further out on the trendline, pricing deals lower.