Q1 2012 Software Industry Trends Report - Berkery Noyes

Complete report

Q1 2012 transaction volume in the Software Industry declined 10 percent compared to the previous quarter, returning closer to the quarterly average for 2011, which was 375 transactions.

Niche Software, which is targeted to specific vertical industries, remained the largest market segment tracked by Berkery Noyes. Although deal volume for Niche Software decreased 15 percent following Q4 2011, the segment's deal value nearly doubled, rising from $6.1 billion to $11.0 billion. Two of the top ten deals in the aggregate software industry for Q1 2012, Cisco Systems' announced acquisition of NDS Group for $5 billion and Vista Equity Partners' announced acquisition of Misys for $2 billion, accounted for this significant rise in value.

Within the Niche Software classification, software used by financial firms was one of the most active segments. 11 of the 21 deals in this space for the quarter were related to capital markets. The largest capital markets transaction in Niche Software was SS&C Technologies Holdings' announced acquisition of Thomson Reuters' PORTIA business for $170 million.

Upon examination of the Infrastructure Software segment, M&A focusing specifically on security increased 75 percent over Q4 2011. The most active Infrastructure Software acquirer for Q1 2012 was Symantec Corporation with three transactions: Nukona, Odyssey Software, and LiveOffice Corporation.