Q4 2023

Software & Tech-Enabled Services M&A Update

In Q4, the North American Technology Software Industry Index increased by 17.6% and outperformed the S&P 500, which increased 11.2% over the same period.
The median EV/Revenue multiple for reported private equity deals decreased to 4.8x in 2023 from 5.6x in 2022, but increased for strategic deals to 3.7x from 3.3x in the prior year.
M&A deal volume in the Software & Tech-enabled Services sector increased 5.2% to 895 completed transactions in Q4 compared to 851 deals in Q3, but decreased 8.8% from 981 deals in Q4 of the prior year.
As a % of total capital invested in M&A transactions in 2023, PE participation decreased to 28.9%, down significantly from 54.8% in the prior year.
North America was the most active region in Q4 with 371 deals. Most notably in the North American market was Broadcom’s $89.0 billion acquisition of VMWare in November 2023.