In the note, RBC analysts added that private-equity deals are more likely to be all-cash, given that debt is becoming harder to raise. They named 16 companies, including pandemic darlings like Zoom and the IT management software firm SolarWinds, which is still reeling from a devastating 2020 hack. Now there are several other companies that are likely takeover targets for either a tech giant or a private-equity firm, RBC analysts said in a recent note to clients. Zendesk, which offers customer-service software, was also taken private for $10.2 billion by an investor group, which Hellman & Friedman and Permira led. The firm also acquired Anaplan, a business-planning-software company, for $10.7 billion in June. In April, Thoma Bravo acquired SailPoint, an enterprise-security-software company, for about $6.9 billion. In the private-equity space, various firms have been acquiring both public- and private-software companies. And just last month, Adobe executives announced the company is acquiring the beloved design startup Figma for $20 billion. On the strategic-M&A side, the chip giant Broadcom made a deal to acquire VMware for a whopping $61 billion back in May.
Additionally, private-equity firms will likely continue snapping up public cloud-software companies and taking them private while prices are low, according to analysts. In this environment, analysts and experts expect to see more consolidation and say that larger players will seize the moment to acquire new tools at a good price. More software M&A is in the forecast as valuations and stock prices continue to drop - and private companies aren't the only ones likely to get gobbled up.
Large companies look to score tools at a discount while private-equity firms also eye takeovers.The software industry is expecting more M&A as software valuations continue to drop.
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