January 4, 2012 – Even with more software acquisitions and mergers in 2012 compared with the year prior, their overall value dropped $12 billion, though there were market strengths in infrastructure and specialty offerings, according to a recap of software M&A transactions by Berkery Noyes.

In all, there were 1,537 transactions last year, a 1 percent increased from 2011, though deal values fell by almost one-fifth in 2012 from the previous year, hitting $68.5 billion, according to the merger tracking and consulting firm. The bulk of 2012 deals (58 percent) fell between the range of $2.7 million and $33.1 million. The number of private equity firms dipping their toes in software transactions increased in 2012 from the previous two years, but only slightly, and strategic vendor acquisitions still ruled in volume (85 percent) and value (72 percent), Berkery Noyes wrote.

Deals for software companies in specialized industries excelled throughout 2012, with the biggest payout marked as warehousing and e-commerce vendor RedPrairie’s nearly $2 billion buy of JDA Software Group. “Niche software,” as Berkery Noyes defines this group, has increased by nearly 200 transactions from 2010 to 2012. Consumer and infrastructure software transactions hovered around 200 for the third year in a row, and the business software market continued a small decline from previous years to register approximately 300 deals in 2012. Combined, infrastructure software deal values reached the largest gains in 2012, topping 2.7 times their value from the previous year.

Google once again led the pack in terms of the number of vendor acquisitions in 2012. The search giant made 10 small, targeted buyouts last year – including Incentive Targeting and Meebo – and Google and its affiliated ventures have made 49 deals total between 2011 and 2012. Equity firm Vista Equity Partners was the most active investment-side venture with 12 deals in 2012.

The following list from Berkery Noyes, in ascending order, is by no means definitive, as it does not include deals were the financial terms were not disclosed. Some financial terms may vary based on rounding and stock options. However, the list accounts for 33 percent of the value of all 2012 transactions, as well as provides a barometer on the information management space.

10) One Equity Partners Buy of M*Modal for $1.05 billion

9) IBM Buy of Kenexa for $1.21 billion

8) VMware Buy of Nicira for $1.26 billion

7) Roper Industries Buy of Sunquest Information Systems for $1.39 billion

6) RedPrairie Buy of JDA Software Group for $1.9 billion

5) Oracle Buy of Taleo for $1.9 billion

4) Turaz Buy of Mysis Plc for $2.01 billion

3) Dell Buy of Quest Software for $2.4 billion

2) SAP Buy of Ariba for $4.4 billion

1) Cisco Buy of NDS Group Ltd. for $4.96 billion

(Editor's note: The initial report from Berkery Noyes on January 4 omitted the IBM deal for Kenexa, as well as the price tag for that deal on the overall 2012 software market value.)