BDO Capital Q1 2021 Technology M&A Market Update

While 2020 brought unprecedented challenges, the pandemic-induced recession catalyzed accelerated technology adoption establishing a further divide between the prospects facing the software-enabled, digital-first economy and the physical economy. As a key enabler, technology allowed organizations and individuals to engage in business, education and training, and healthcare in remote environments, sustaining business operations. Enterprise software and service providers focused on remote collaboration and Cloud migration attracted strong buyer interest, particularly those companies that showed pandemic resilient business models.

Following a fervent first quarter of dealmaking, the pandemic paralyzed the global software market and resulted in a decade-low performance as evidenced by the approximately 21% drop in large-cap deal activity during Q2 2020. However, emerging buyer confidence drove record high levels of activity by Q4 2020, fueling some of the largest software deals announced to date.