Here is an overview of the corporate software M&A transactions we have recorded this year. With almost 90 deals in Germany, Austria, and Switzerland, another dynamic year is coming to an end.
Although the 4th quarter is not yet over and several company divestitures that have already been signed have not yet been published, we are observing a significant decline in the number of software transactions this year compared to the two record years of 2022 and 2021. This decline can be seen across all three sub-markets of Germany, Austria, and Switzerland.
In addition to a changed interest rate environment, the background to this development, from our perspective, includes the following: The number of transactions in numerous functional software subsectors in the DACH region has increased so rapidly in recent years that in some areas, there are simply no longer enough targets on the market to meet the still very strong demand from strategic and private equity investors. One example of this is the Business Intelligence/CPM/Analytics software market. Another reason, from our perspective, is that due to a certain degree of uncertainty (especially with new customer contracts) in numerous enterprise software end-customer markets (e.g., manufacturing), transactions often take longer to complete because, in many cases, buyers have to wait for another monthly BWA before signing a contract.
While the number of transactions has declined, we see no significant change in the high and attractive valuation multiples in our core business of established and founder-led enterprise software companies. This is different in the VC-based environment.
Transactions with international buyers still make up a very high percentage of deals (in our own deals, the proportion is > 70%).
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