A pair of 2018 software deals in 2019

by Brenon Daly

When Google and Salesforce announced their recent blockbuster software acquisitions, we had to check the date of the deals. The two high-multiple purchases of analytics vendors didn’t look like anything that’s been printed in 2019. Instead, the pair of transactions looked like something of a 2018 vintage.

Both Google-Looker and Salesforce-Tableau share all of the hallmarks of the significant deals that pushed software M&A to record levels last year: Deep-pocketed, brand-name software giants top an already high valuation for a company in a key segment of the emerging tech landscape. Consider the transactions fitting that description that 451 Research‘s M&A KnowledgeBase had already recorded at this point in 2018:

Microsoft’s seminal $7.5bn acquisition of DevOps kingpin GitHub.

Adobe’s $1.7bn purchase of e-commerce software provider Magento Commerce.

Salesforce’s $6.6bn reach for integration specialist MuleSoft, which had been the cloud company’s largest transaction until Tableau.

SAP’s $2.4bn pickup of CallidusCloud, a SaaS sales compensation management vendor.

All of those transactions went off at double-digit multiples, as did the Salesforce-Tableau and Google-Looker pairings. (Clients of the M&A KnowledgeBase can see our full estimates for both the trailing and forward valuation that the search giant paid in its largest deal in more than five years.)

Rather than the expansive (and expensive) software transactions of 2018, corporate acquirers so far this year have looked to consolidate much more mature markets. For instance, the M&A KnowledgeBase already lists three semiconductor acquisitions valued at more than $1bn in 2019, along with a similar number of massive deals in the electronic payments industry. Compared with those down-to-earth moves, the cloud plays of Google and Salesforce seem to belong to a different era of dealmaking.