Slowdown in acuisitions 2023 

Just who are the most active acquirers for smaller takeouts?

To answer the question. I reviewed the roughly 560 US software acquisitions under $400m since January 1, 2020.

ServiceNow tops the list with 5 acquisitions. Alphabet ingested 4 companies. So did Medallia. Most of the other top 25 buyers, including Splunk, Apple, & VMWare, closed the period with 3 M&A events, about one annually.

Examining the data by dollars reveals Motorola spent $800m, more than double the average across this group. Alphabet bought $400m of startups & Apple $375m.

Recruiter.com prefers small acquisitions: 4 purchases during the period, totalling less than $12m in value.

How does willingness to pay vary by acquirer? CrowdStrike, Alphabet, & Motorola have paid about $3m per employee, roughly twice the median.

The rule of thumb has hovered at $1m per person in the past. Perhaps inflation seeped into this market just as much as groceries & gas.

Despite the macroeconomic challenges, the M&A market has persisted at roughly constant pace.

453 distinct acquirers each spent $50m annually on smaller acquisitions over the last three years, providing on $10-20b of liquidity to founders, employees, & investors each year.