After a drop in software deals this year, MoffettNathanson suggests Oracle, Salesforce, Adobe, Microsoft and others should make acquisitions in the coming quarters.
Here comes more tech deals.
Software M&A has been tepid in 2017, after a bonanza last year that saw companies such as LinekedIn Corp. and NetSuite Inc. come off the market. MoffettNathanson LLC calculates that the total value of transactions in the sector is down 59.1% from last year.
Things are due to pick up, though, MoffettNathanson analyst Adam Holt suggests in a recent report. Industry leaders such as Oracle Inc. (ORCL – Get Report) , Salesforce.com Inc. (CRM – Get Report) , Adobe Systems Inc. (ADBE – Get Report) and Microsoft Corp. (MSFT – Get Report) should be ready to strike their next deals soon, the analyst wrote.
Valuations have stabilized for many companies, Holt added, making it easier for many companies, Holt added, making it easier for buyers and sellers to agree on price. Firms such as Vista Equity Partners LLC and Thoma Bravo LLC have become more aggressive technology buyers, and with sponsors getting more comfortable with tech, Holt suggested that a private firm could launch a buyout worth $10 billion or more. As tax cuts that could benefit cash-rich tech companies have languished, the analyst added, “would-be acquirers have given up waiting for Washington and are moving forward with their agendas.”
December marks the first anniversary of Microsoft’s $26.2 billion purchase of LinkedIn, and Holt suggested that the acquisitive software group could soon be ready for another transaction. A spokesperson did not respond to a query on Friday.
Salesforce, which also declined to comment, completed its last multi-billion dollar deal, the $2.85 billion purchase of Demandware Inc., in July 2016
Adobe has “gone a long time without a midsized or large deal,” Holt wrote, and could use acquisitions to continue its pace of 20% revenue growth. The company did not respond to a query.
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