Private equity money played a larger role in software acquisitions during the first half of 2013, highlighted by the biggest deal of the year so far to take BMC private, according to software M&A analysis from Berkery Noyes.

In its first half of 2013 mergers and acquisitions analysis, Berkery Noyes counted 727 total software market deals, down 19 from the second half in 2012, but at the same aggregate value, $29.6 billion. It’s the lowest number of deals for a six-month period in the last three years, with a high water mark of 812 in the first half of last year. Deal value is also down from the recent top combined total of $42.1 billion, reached during the second half of 2011.

BMC’s nearly $6.9 billion deal with equity firms to go private again in early May topped all others in value for the first half of the year. It also led the increasing role in private equity investment in the software space, including five of the top 10 money deals, according to the analysis from Berkery Noyes. On a whole, the quantity of private equity deals is about the same since last year, but has almost doubled in value to $12.9 billion in the first half of 2013 compared with those same six months in 2012, says James Berkery, CIO at Berkery Noyes.

“This rising number of high value deals backed by financial sponsors seems to indicate a growing level of buyer confidence in the current M&A marketplace,” he says.

Berkery Noyes breaks its software segments into four categories: niche, consumer, business and infrastructure. As it has for the last few years, niche, or specialty, software M&A led the other categories in the number of transactions with approximately 350. While infrastructure deals gained somewhat in value, consumer segment reflected the largest increase in the number of transactions with a 24 percent increase.

Looking ahead, James Berkery says the education software market may be an increasing source of buyouts and investment through the year.

“This is an area that is beginning to experience more technological innovation, especially around assessment and testing. Online platforms that facilitate instruction and interactive feedback are proving to be desirable acquisition candidates,” says Berkery. “Pearson’s acquisition of Learning Catalytics and McGraw-Hill Education’s acquisition of ALEKS Corporation were two such examples during the first half of 2013. In addition, Renaissance Learning’s acquisition of e-reading platform Subtext shows that tablets are starting to play a more significant role in the classroom.”

The top 10 most valuable deals for the first half of 2013 – which made up 60 percent of all deal value – as reported by Berkery Noyes were:

10) McAfee bought Stonesoft for $352 million

9) Cisco bought Intucell for $475 million

8) Adobe Systems bought Neolane for $600 million

7) OMERS Private Equity bought Civica Group PLC for $608 million

6) CITIC Capital bought AsiaInfo-Linkage for $890 million

5) Vista Equity Partners bought Websense for $942 million

4) Fiserv bought Open Solutions for $1.01 billion

3) salesforce.com bought ExactTarget for $2.25 billion

2) Fidelity National Financial bought Lender Processing Services for $3.91 billion

1) Bain Capital, Golden Gate Capital, etc. bought BMC Software for $6.81 billion

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