Kroll, the leading provider of data, technology and insights related to risk, governance and growth, has found that the second quarter of 2022 saw robust M&A deal activity in the global software sector. Despite continued turmoil in the public equity markets, the strength and number of deals were evident in global software with a total of 628 deals at a disclosed value of $130 billion (bn), equaling the record set just two quarters earlier. The strength in deal activity underscores the demand from both private equity and strategic acquirers for software assets which drive the digitalization of business processes.

While the sector performed well overall, further analysis by Kroll suggests the quarter saw a shift to smaller deals. When the findings are adjusted to exclude the three largest deals, the deal volume is skewed toward smaller transactions, including platform bolt-ons and strategic tuck-ins. The quarter also saw a complete absence of SPAC transactions and a relative slowdown in June, potentially signalling a quieter summer for M&A activity.

Rory O’Sullivan, Managing Director in Kroll’s Technology M&A practice (formerly known as Pagemill Partners) commented: “Although the bar may be higher and liquidity is decreasing, disciplined buyers and investors are taking advantage of the pullback in public valuations, as many found themselves priced out of opportunities in 2021. Where public meets private, the pace of activity for private equity-backed take-private transactions has accelerated and is likely to continue into H2 2022.”