Software M&A deals hit over $3 billion in Q2
July 2020 by Atlas VPN
According to data analyzed by the Atlas VPN research team, the total monetary value of software M&A deals reached $3 billion USD during the second quarter of 2020. In this scenario, M&A stands for "mergers and acquisitions." It is a term used to describe companies’ consolidation through various types of financial deals, such as mergers, acquisitions, purchase of assets, and others.
In the second quarter of 2020, the largest financial transaction was made between Apttus, a software provider specializing in business process automation, and Conga, a cloud-based document management solution provider. The total value of the deal was $715 million USD, according to a GP Bullhound report.
The second-largest deal was made between NetApp and Spot companies. NetApp, a cloud data services and data management provider bought Spot for $450 million dollars. Together, these services will be aiming to help companies make applications and cloud infrastructures work together hassle-free.
During the same period, Facebook bought Giphy, a platform for sharing short videos with no sounds, also known as gifs. The value of the deal between these companies was $400 million USD. Meanwhile, Verizon, a well-known telecommunications company, acquired BlueJeans for the same amount of money. BlueJeans company provides a video conferencing service.
Meanwhile, Cognizant, a well-known IT company, acquired Collaborative Solutions, hitting a total value of $385 million dollars. Collaborative Solutions is a B2B organization that offers enterprise cloud consulting services. At the same time, Sinch, a Swedish cloud and communications company, made a $245 million dollars investment in SAP Digital Interconnect, a messaging business.
At the same time, Microsoft made a $165 million dollar investment in CyberX. This startup offers solutions to reduce risk from unmanaged Internet of Things devices, while Rapid7 acquired DivvyCloud for $145 million USD. Rapid7, the buyer, is a risk-management tool, and DivvyCloud protects cloud and container environments from issues like misconfigurations, policy violations, or cyberthreats.
Finally, Thomabravo, an American equity and growth capital firm, bought a cybersecurity company named Exostar for $100 million dollars. At the same time, Medallia, a customer experience management provider, acquired Voci, a voice-to-text tool, for $59 million USD.
Hence, the total monetary value of M&A deals made between software companies surpassed $3 billion USD dollars. It is safe to assume that the fact companies influenced the deals’ monetary value was operating remotely amid the global pandemic. Therefore, corporations were investing in cybersecurity, communication or cloud data services.
Communications platform providers had the largest YoY revenue growth
Data compiled from Capital iQ and SEC Filings revealed that Slack, a B2B communication platform, had a 38% Year-over-Year (YoY) growth in revenue, while Szcaler had an increase of a 36% rate. Szcaler is a cloud-based information security company that provides web security, firewall, antivirus, vulnerability management solutions.
By helping organizations sign agreements online, Docusign had a 36% revenue increase, while the growth rate of Twilio, a communications platform, reached 34 percent.
At the same time, Okta, a cloud software company provider that helps companies manage and secure user authentication into applications, had a 33% YoY revenue growth.
Companies that had a 20%+ revenue YoY growth provide incident response, business-planning, or online survey tools. Meanwhile, organizations that had a 10% or bigger revenue growth rate offer online education, customer relationships, financial or human resources management services, and data storage and integration tools.
Lastly, companies with a lower than a 10% growth rate in revenue provide application development or help companies manage their subscription-based services.