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Software Deals Value Up, Volume Down

August 1

A new Venture Reporter study on recent software industry M&A transactions concludes that fewer deals were completed in the last quarter but the average deal size increased substantially. The study concludes that the deals seemed more motivated by survival instincts than by a raw desire for growth.

Larger Deals
Excluding Peoplesoft’s well-publicized acquisition of JD Edwards, the largest deal last quarter was General Dynamics’ purchase of defense industry information systems vendor Veridian for $1.5 billion. Then PDF Solutions, the chip design software publisher, bought competitor IDS Software for about $51 million.

ESS Technology, provider of “silicon and software solutions” to the broadband, Internet and digital video industries bought Pictos Technologies for $27 million. Pictos sells digital imaging chips. In another larger deal, L-3 Communications, in the business of selling “intelligence, surveillance and reconnaissance (ISR) systems and products” acquired Aeromet,, another vendor to the defense industry, this one providing systems integration and related aircraft modification services.

Celartem Technology USA, a sub of Japanese company Celartem, acquired LizardTech Software, an enterprise content management software company for about $11 million.

Deals by Software Industry Sector
The most transactions, 16, occurred in the services/management sofware sector, followed by the communications/media/Internet sector at 14 deals. A close third was BTO/BPM/Automation with 13 deals.


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