Technology and Software Industry Insight March 2021
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Technology and Software
Industry Insight
March 2021Technology and Software
Industry Insight | March 2021
U.S. Technology and Software Industry – M&A Market Overview
U.S. Technology and Software transaction activity has remained strong in 2020
U.S. Number of Transactions by Buyer Type U.S. Transaction Multiples
24.4x
32 19
23 25 18.2x 18.1x
29 16.0x
21
19
19
15.7x 12.4x
372 381
12 13.2x 13.0x
11.7x 12.0x
292 286
266 257 218
233
5
148 3.1x 3.2x 3.0x
2.7x 2.2x 2.6x
2.1x 2.3x 2.3x 1.9x
67
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD YTD
Strategic Financial EV / EBITDA EV / Revenue
Source: Capital IQ, data as of March 2021
Note: Represents transactions with Total Transaction Value greater than $1.0 million
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1Technology and Software
Industry Insight | March 2021
Peakstone Technology and Software Index – Trading Statistics
Technology and Software categories performed favorably compared to the S&P 500
Relative Stock Performance
300%
Internet: 265%
250% Software: 127%
Financial Technology: 120%
200%
S&P 500: 93%
150% Financial Software: 89%
SaaS: 43%
100%
50%
Peakstone Financial Software Index
FISV, JKHY, BKI, OFSS
0%
Peakstone Financial Technology Index
V, MA, ADP, FDC, MCO, PAYX, FLT, WU, MGI,
TRI
-50%
Peakstone Internet Index
AMZN, FB, GOOG.L, NFLX
Peakstone Software Index
MSFT, GOOG.L, ORCL, CSCO, IBM, SAP, HPQ
Peakstone SaaS Index
CRM, WDAY, VEEV, ULTI, ATHN, GWRE, MDSO
Source: Capital IQ, data as of March 2021
Note: Peakstone Indexes are equally weighted
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2Technology and Software
Industry Insight | March 2021
Peakstone Technology and Software Index – Trading Statistics
Technology and Software categories performed favorably compared to the S&P 500
Comparable Valuation Trends – Enterprise Value / EBITDA
120.0x
SaaS: 61.2x
100.0x Internet: 25.1x
Financial Software: 22.6x
80.0x
Financial Technology: 21.1x
S&P 500: 17.7x
60.0x
Software: 12.8x
40.0x
Peakstone Financial Software Index
20.0x FISV, JKHY, BKI, OFSS
Peakstone Financial Technology Index
V, MA, ADP, FDC, MCO, PAYX, FLT, WU, MGI,
TRI
0.0x
Peakstone Internet Index
AMZN, FB, GOOG.L, NFLX
Peakstone Software Index
MSFT, GOOG.L, ORCL, CSCO, IBM, SAP, HPQ
Peakstone SaaS Index
CRM, WDAY, VEEV, ULTI, ATHN, GWRE, MDSO
Source: Capital IQ, data as of March 2021
Note: Peakstone Indexes are equally weighted
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3Technology and Software
Industry Insight | March 2021
Public Trading Comparables by Sector
Selected Technology and Software Public Trading Comparables
($ in millions) Stock % 52-Week Market Enterprise Enterprise Value / Forward Gross EBITDA
Company Name Price High Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin %
Financial Software
Oracle Financial Services Software Limited $3,120 88% $276,023 $229,266 4.6x 9.4x 9.8x 14.9x 56% 48%
Fiserv, Inc. 123 97% 81,949 103,322 7.0x 21.0x 63.4x 22.6x 48% 32%
Black Knight, Inc. 74 76% 11,417 14,236 11.5x 27.9x 39.0x 33.5x 46% 34%
Jack Henry & Associates, Inc. 148 73% 11,290 11,209 6.5x 24.1x 29.5x 35.8x 40% 26%
Financial Software Median $135 82.1% $46,683 $58,779 6.7x 22.6x 34.2x 28.1x 47% 33%
Financial Technology
Visa Inc. $219 96% $471,611 $478,308 22.3x 32.5x 34.3x 38.4x 97% 69%
Mastercard Incorporated 365 94% 364,564 367,141 24.0x 42.0x 45.0x 45.6x 100% 57%
Automatic Data Processing, Inc. 186 98% 79,623 80,460 5.5x 20.2x 24.3x 30.4x 45% 26%
Moody's Corporation 289 95% 53,810 58,252 10.8x 21.0x 23.8x 27.4x 73% 50%
Thomson Reuters Corporation 110 95% 54,528 56,808 7.5x 44.2x 63.6x 49.6x 35% 24%
Paychex, Inc. 98 98% 35,086 35,114 8.8x 21.2x 24.9x 32.0x 68% 40%
FLEETCOR Technologies, Inc. 283 97% 23,718 27,296 11.4x 22.7x 28.1x 22.9x 79% 49%
The Western Union Company 25 97% 10,273 12,147 2.5x 9.5x 12.2x 12.1x 42% 25%
MoneyGram International, Inc. 7 58% 498 1,218 1.0x 4.3x 12.2x 74.5x 46% 18%
Financial Technology Median $186 96.0% $53,810 $56,808 8.8x 21.2x 24.9x 32.0x 68% 40%
Internet
Amazon.com, Inc. $3,029 85% $1,524,789 $1,541,622 4.0x 28.3x 67.3x 63.7x 40% 12%
Alphabet Inc. 2,030 95% 1,367,533 1,258,282 6.9x 21.8x 30.5x 29.2x 54% 30%
Facebook, Inc. 281 92% 793,418 742,641 8.6x 18.0x 22.7x 24.9x 81% 46%
Netflix, Inc. 505 85% 223,569 233,874 9.4x 48.5x 51.0x 50.8x 39% 19%
Internet Median $1,267 88.8% $1,080,476 $1,000,462 7.8x 25.1x 40.8x 40.0x 47% 24%
Source: Capital IQ, data as of March 2021
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4Technology and Software
Industry Insight | March 2021
Public Trading Comparables by Sector (continued)
Selected Technology and Software Public Trading Comparables
($ in millions) Stock % 52-Week Market Enterprise Enterprise Value / Forward Gross EBITDA
Company Name Price High Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin %
Software
Microsoft Corporation $231 94% $1,740,140 $1,690,933 11.0x 22.9x 28.1x 30.6x 68% 47%
Alphabet Inc. 2,030 95% 1,367,533 1,258,282 6.9x 21.8x 30.5x 29.2x 54% 30%
Oracle Corporation 67 91% 192,447 226,609 5.7x 12.8x 14.7x 14.2x 81% 44%
Cisco Systems, Inc. 49 98% 206,023 191,056 4.0x 12.0x 14.1x 14.7x 64% 32%
International Business Machines Corporation 130 96% 116,221 169,007 2.3x 9.7x 19.7x 11.8x 48% 21%
SAP SE 103 72% 122,204 131,012 4.8x 16.5x 20.4x 21.3x 71% 28%
HP Inc. 30 97% 37,784 41,002 0.7x 7.6x 9.7x 9.6x 19% 9%
Software Median $103 94.6% $192,447 $191,056 4.8x 12.8x 19.7x 14.7x 64% 30%
SaaS
salesforce.com, inc. $210 74% $192,931 $187,378 8.8x 43.3x NM 60.8x 74% 15%
Workday, Inc. 250 88% 60,541 59,243 13.7x 236.5x NM 88.5x 73% 3%
Veeva Systems Inc. 254 78% 38,348 36,748 25.1x 87.7x 97.3x 78.4x 72% 28%
Guidewire Software, Inc. 102 76% 8,521 7,832 10.3x NM NM NM 53% NM
SaaS Median $230 77.2% $49,445 $47,995 12.0x 87.7x 97.3x 78.4x 72% 15%
Source: Capital IQ, data as of March 2021
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5Technology and Software
Industry Insight | March 2021
Selected Technology and Software Industry Transactions
Selected Technology and Software Transactions
Transaction
Date Target / Issuer Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments
Cardlytics, Inc. (NasdaqGM:CDLX) signed an agreement to acquire DOSH Holdings,
Cardlytics, Inc.
03/01/2021 DOSH Holdings, Inc. $271 - Inc. for approximately $270 million on February 26, 2021. As per the terms of
(NasdaqGM:CDLX)
consideration, $150 million will be payable in cash subject to adjustments and 0.
iHeartMedia + Entertainment, Inc. entered into a share purchase agreement to
iHeartMedia + Entertainment,
02/17/2021 Triton Digital, Inc. $230 - acquire Triton Digital, Inc. from The E.W. Scripps Company (NasdaqGS:SSP) for $230
Inc.
million on February 16, 2021.
Confirmit AS agreed to acquire FocusVision Worldwide, Inc. from EQT Mid Market US
01/07/2021 FocusVision Worldwide, Inc. $365 Confirmit AS - managed by EQT Partners AB and others for approximately $370 million on January
7, 2021.
Zip Co Limited (ASX:Z1P) entered into an agreement to acquire remaining 86% stake
06/02/2020 QuadPay, Inc. $370 Zip Co Limited (ASX:Z1P) - in QuadPay, Inc. from Adam Ezra, Brad Lindenberg and others for approximately
$370 million on June 2, 2020.
Cognizant Technology Cognizant Technology Solutions Corporation (NasdaqGS:CTSH) entered into an
05/05/2020 Collaborative Solutions, LLC $395 Solutions Corporation - agreement to acquire Collaborative Solutions, LLC for approximately $390 million on
(NasdaqGS:CTSH) May 5, 2020.
Social Finance, Inc. signed a definitive agreement to acquire Galileo Financial
04/07/2020 Galileo Processing, Inc. $1,200 Social Finance, Inc. - Technologies, Inc. from Mercato Partners Growth II, L.P. managed by Mercato
Partners and others for $1.2 billion on April 7, 2020.
GoDaddy Inc. (NYSE:GDDY) entered into a definitive agreement to acquire Registry
04/06/2020 GoDaddy Registry $216 GoDaddy Inc. (NYSE:GDDY) -
business of Neustar, Inc. for approximately $220 million on April 6, 2020.
Source: Capital IQ, data as of March 2021
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6Technology and Software
Industry Insight | March 2021
Selected Technology and Software Industry Transactions (cont.)
Selected Technology and Software Transactions
Transaction
Date Target / Issuer Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments
Palo Alto Networks, Inc. (NYSE:PANW) entered into a definitive agreement to acquire
Palo Alto Networks, Inc.
03/31/2020 CLOUDGENIX INC. $403 - CloudGenix, Inc. for approximately $420 million on March 31, 2020. The
(NYSE:PANW)
consideration will be paid in cash and is subject to certain adjustments.
A group of investors agreed to acquire 98.6% stake in Grindr LLC from Kunlun Group
03/06/2020 Grindr LLC $620 - -
Limited for approximately $610 million on March 6, 2020.
Vitruvian Partners LLP; Lead Vitruvian Partners LLP and Lead Edge Capital Management, LLC signed a definitive
03/04/2020 Azul Systems, Inc. $340 Edge Capital Management, - agreement to make a majority investment on Azul Systems, Inc. for $340 million on
LLC March 4, 2020.
DocuSign International, Inc. entered into a share purchase agreement to acquire
unknown stake in Seal Software Limited from Tern Plc (AIM:TERN) and others for
02/27/2020 Seal Software Limited $188 DocuSign International, Inc. -
approximately $190 million on February 26, 2020. The consideration will be paid in
cash.
salesforce.com, inc. salesforce.com, inc. (NYSE:CRM) signed a definitive agreement to acquire an
02/25/2020 Vlocity, Inc. $1,400 -
(NYSE:CRM) unknown remaining stake in Vlocity, Inc. for $1.3 billion on February 25, 2020.
Cornerstone OnDemand, Inc. (NasdaqGS:CSOD) entered into an agreement to
Cornerstone OnDemand, Inc.
02/24/2020 Saba Software, Inc. $1,295 - acquire Saba Software, Inc. from Vector Talent Holdings, L.P. managed by Vector
(NasdaqGS:CSOD)
Capital for $1.4 billion on February 24, 2020. Total consideration consists of $1.
Metis Ventures LLC made a non-binding proposal to acquire Xperi Corporation
Xperi Holding Corporation
02/23/2020 $1,582 Metis Ventures LLC 26.2x (NasdaqGS:XPER) for $1.2 billion on February 21, 2020. Metis Ventures LLC offered
(NasdaqGS:XPER)
to acquire all shares of Xperi Corporation for $23.3 each in cash. Nashville S.a.r.l.
Source: Capital IQ, data as of March 2021
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7Technology and Software
Industry Insight | March 2021
Selected Technology and Software Industry Transactions (cont.)
Selected Technology and Software Transactions
Transaction
Date Target / Issuer Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments
AlpInvest Partners B.V.;
Symphony Technology Group, LLC, Ontario Teachers' Pension Plan Board and
Symphony Technology Group,
02/18/2020 RSA Security LLC $2,075 - AlpInvest Partners B.V. entered into a definitive agreement to acquire RSA Security
LLC; Ontario Teachers'
LLC from Dell Technologies Inc. (NYSE:DELL) for $2.1 billion on February 18, 2020.
Pension Plan Board
First American Financial Corporation (NYSE:FAF) entered into an agreement to
First American Financial
02/13/2020 Docutech LLC $350 - acquire Docutech LLC from Serent Capital and Ty Jenkins for $350 million on
Corporation (NYSE:FAF)
February 13, 2020. The consideration will be paid in cash.
Infosys Limited (NSEI:INFY) entered into a definitive agreement to acquire Simplus
02/10/2020 Simplus $200 Infosys Limited (NSEI:INFY) - from Salesforce Ventures, Inc., other institutional investors, founders and key
employees for $200 million on February 10, 2020.
Advent International Advent International Corporation and Crosspoint Capital Partners, LP entered into a
02/06/2020 Forescout Technologies, Inc. $1,664 Corporation; Crosspoint - definitive agreement to acquire Forescout Technologies, Inc. (NasdaqGM:FSCT) from
Capital Partners, LP Jericho Capital Asset Management L.P., Corvex Management LP and others for $1.
ZelnickMedia Corporation acquired Simeio Solutions, LLC from Welsh, Carson,
02/03/2020 Simeio Solutions, LLC $240 ZelnickMedia Corporation -
Anderson & Stowe on January 31, 2020.
LexisNexis Risk Solutions Inc. entered into an agreement to acquire Emailage Corp.
02/03/2020 Emailage Corp. $480 LexisNexis Risk Solutions Inc. - on February 3, 2020. Emailage will become a part of the Business Services group of
LexisNexis Risk Solutions.
K12 Management, Inc. entered into a definitive agreement to acquire Galvanize, Inc.
01/27/2020 Galvanize, Inc. $165 K12 Management Inc. -
from a group of sellers for approximately $170 million on January 21, 2020.
Source: Capital IQ, data as of March 2021
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8Technology and Software
Industry Insight | March 2021
Selected Technology and Software Industry Transactions (cont.)
Selected Technology and Software Transactions
Transaction
Date Target / Issuer Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments
Equinix, Inc. (REIT) (NasdaqGS:EQIX) signed a definitive agreement to acquire Packet
Equinix, Inc. (REIT)
01/14/2020 Packet Host, Inc. $290 - Host, Inc. on January 14, 2020. The transaction is subject to customary closing
(NasdaqGS:EQIX)
condition and antitrust approval.
Visa Inc. (NYSE:V) signed a definitive agreement to acquire remaining majority stake
01/13/2020 Plaid Inc. $4,900 Visa Inc. (NYSE:V) - in Plaid Inc. for $4.9 billion on January 13, 2020. Visa will pay total cash consideration
of $4.
ICF Incorporated, L.L.C. entered into a definitive agreement to acquire Incentive
Incentive Technology Group,
01/13/2020 $255 ICF Incorporated, L.L.C. - Technology Group Llc from Shadi Michelle Branch and Adam Branch for
LLC
approximately $260 million on January 12, 2020.
Trimble Inc. (NasdaqGS:TRMB) signed a definitive agreement to acquire Kuebix, LLC
Trimble Inc.
01/09/2020 Kuebix, LLC $201 - from Pillar VC and others on January 9, 2020. Upon closing, Kuebix's business will be
(NasdaqGS:TRMB)
part of Trimble's Transportation Sector.
Symantec Cyber Security Accenture plc (NYSE:ACN) agreed to acquire Symantec Cyber Security Services
01/07/2020 Services Business of $200 Accenture plc (NYSE:ACN) - Business from Broadcom Inc. (NasdaqGS:AVGO) on January 7, 2020. The transaction
Broadcom Inc. is subject to antitrust approval.
Markem-Imaje Corporation entered into a definitive agreement to acquire Sys-Tech
01/06/2020 Sys-Tech Solutions, Inc. $163 Markem-Imaje Corporation -
Solutions, Inc. on January 6, 2020. Upon closing Sys-Tech Solutions, Inc.
Insight Venture Management, Insight Venture Management, LLC, CapitalG Management Company, LLC and other
01/06/2020 Armis, Inc. $1,100 LLC; CapitalG Management - existing stockholders agreed to acquire Armis, Inc. at a value of approximately $1.1
Company, LLC billion on January 6, 2020.
Source: Capital IQ, data as of March 2021
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9Technology and Software
Industry Insight | March 2021
Selected Technology and Software Industry Transactions (cont.)
Selected Technology and Software Transactions
Transaction
Date Target / Issuer Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments
Snap Inc. (NYSE:SNAP) acquired remaining stake in AI Factory, Inc. for approximately
01/03/2020 AI Factory, Inc. $166 Snap Inc. (NYSE:SNAP) -
$170 million in December 2019.
Cadence Design Systems, Inc. (NasdaqGS:CDNS) entered into a definitive agreement
Cadence Design Systems, Inc. to acquire AWR Corporation from National Instruments Corporation
12/02/2019 AWR Corporation $160 -
(NasdaqGS:CDNS) (NasdaqGS:NATI) for approximately $160 million. The consideration of $160 million
will be paid in cash.
Palo Alto Networks, Inc. Palo Alto Networks, Inc. (NYSE:PANW) entered into a definitive agreement to acquire
11/25/2019 Aporeto, Inc. $150 -
(NYSE:PANW) Aporeto Inc. for approximately $150 million on November 25, 2019.
Cubic Corporation (NYSE:CUB) exercised an option to acquire remaining 80% stake in
11/20/2019 PIXIA Corp. $200 Cubic Corporation (NYSE:CUB) - PIXIA Corp. for $200 million in November, 2019. The all cash transaction will be
funded from borrowings under Cubic’s existing credit facilities.
Open Text Corporation (NasdaqGS:OTEX) entered into a definitive agreement to
Carbonite, Inc. Open Text Corporation
11/11/2019 $1,494 35.0x acquire Carbonite, Inc. (NasdaqGM:CARB) for approximately $840 million on
(NasdaqGM:CARB) (NasdaqGS:OTEX)
November 10, 2019.
RealPage, Inc. (NasdaqGS:RP) entered into an agreement to acquire Buildium, LLC
11/06/2019 Buildium, LLC $580 RealPage, Inc. (NasdaqGS:RP) - from Sumeru Equity Partners Fund L.P., managed by Sumeru Equity Partners, LP, and
K1 Private Investors, L.P. and K1 Private Investors (A), L.P.
Workday, Inc. (NasdaqGS:WDAY) signed a definitive agreement to acquire Scout RFP,
Workday, Inc.
11/04/2019 Scout RFP, Inc. $540 - Inc. from a group of investors for approximately $540 million on November 4, 2019.
(NasdaqGS:WDAY)
The consideration is payable in cash and is subject to adjustments. Scout RFP, Inc.
Source: Capital IQ, data as of March 2021
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10Technology and Software
Industry Insight | March 2021
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11Technology and Software
Industry Insight | March 2021
Contact Us
About Peakstone
Peakstone is an investment bank that specializes in mergers and acquisitions advisory and capital raising for middle market
clients. Our team is comprised of senior investment banking professionals who have decades of experience and have executed
hundreds of transactions totaling billions of dollars. For additional information, visit www.peakstone.com.
Contact
Alex Fridman Ethan White
Managing Director Analyst
alex@peakstone.com ewhite@peakstone.com
312-346-7307 312-346-7307
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