SaaS M&A multiples in Q2

Software Equity Group is an investment bank that puts out excellent research on SaaS markets. They’re also a great group of bankers. They just released their latest report on Q2. A summary is below but the full report may be found at https://softwareequity.com/research/.

SaaS M&A is still healthy, for now. “Overall, the volume of SaaS M&A deals and associated multiples remain strong. The second quarter of 2022 was exceptionally strong, with 580 SaaS M&A deals — the second-highest transaction count on record, trailing only 1Q22. While it is consensus that deal volume will slow down in the second half of 2022, SEG believes markets will still see a year-over-year (YOY) increase.”

SaaS multiples are also holding. “Impressively, on the M&A side, the median SaaS EV/Revenue multiple dropped only 4.5% year-over-year (YOY). Compared to public markets, the less severe drop in valuations in M&A details the relative strength of the SaaS M&A market.”

We’ll see if the multiples and volumes hold, but so far so good. Big thanks to SEG for putting the data together. Reach out to them if you’re selling your business; they’re excellent.

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