Though enterprises across the globe have seen a sharp downward trend in their growth and revenue in the wake of the COVID crisis, it only ended up fueling the M&A activity at an unprecedented pace.
COVID crises have badly affected enterprises across the globe and forced enterprises to seek newer ways to stay operational. As incorporating innovative technology becomes a necessity, enterprises have begun to find tools and skills that will help to keep their workforce intact. This has been driving enterprises to partner or acquire other enterprises.
According to the latest Enterprise Software M&A report published by Hampleton partners, the number of deals in the enterprise ecosystem has skyrocketed, with 836 deals alone in the second half of 2020 when compared with the 641 in the first half.
The report also states that the total transaction of all the deals is reaching $112 billion, the highest amount ever recorded. But, at the same time, the figures could have been much higher. Since the uncertainty around the COVID-19 crisis was all-time high, enterprise leaders gave a substantial discount to the buyers.
As per Miro Parizek, Founder, Hampleton Reports in the Hampleton’s Enterprise Software M&A report, “The new circumstances and challenges around Covid-19 have created opportunities for software services. Businesses that are increasing their digital transformation efforts are looking to software tools to help them navigate the digital sphere.”
The Hampleton’s M&A report also concentrates on providing information on the current enterprise landscape. According to the report, buyers are actively looking for enterprise applications that will enable them to streamline their processes, especially in the supply chain and logistics industries, as shipping and digital commerce are continually replacing the traditional retail methodologies.
Customer analytics, along with business intelligence, is witnessing significant growth as digital customer acquisition and retention have become a top priority for digital commerce newcomers as well as existing players alike.
The report further delves into how the infrastructure, as well as APIs, are playing a critical role for enterprises that are trying to enhance and improve their architecture as well as ensure their systems are up to speed. One such great example of this is the acquisition of Plumbr’s application performance monitoring (APM) service by Splunk, for an undisclosed amount.
Since remote work is becoming a norm, enterprises will continue to improve their cloud infrastructure. Also, the enterprises which have been left behind in their digital transformation journey would start to find partners that will help them get back to the market. These are just a couple of factors that will only increase the M&A in the coming year.
In his statement to Hampleton Partners, Miro stated, “We anticipate Tech M&A to remain robust in both volume and value this year as technology vendors continue making strategic acquisitions, and traditional industry players and financial buyers add more technology to their portfolios.”