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6 SaaS Acquisitions Seen In 2016 Signal A Shift In Private Equity Appetite

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6 SaaS Acquisitions Seen In 2016 Signal A Shift In Private Equity Appetite

2016 has been witness to record M&A activity among publicly traded SaaS companies. JP Morgan analyst Mark Murphy pointed to six acquisitions of public SaaS companies in the year thus far, versus only three for the full year of 2015, two in 2014, two in 2013 and five in 2012.

The companies that have been bought out so far this year were all small caps: Marketo Inc (NASDAQ: MKTO), SciQuest, Inc. (NASDAQ: SQI), Incontact Inc (NASDAQ: SAAS), Opower Inc (NYSE: OPWR), Textura Corp (NYSE: TXTR) and Cvent Inc (NYSE: CVT).

Related Link: 8 Mergers You Might Have Missed On Tuesday

Interestingly, JPMorgan’s report highlighted that three of these companies -- Marketo, SciQuest and Cvent -- were all purchased by private equity firms. This could be signaling a trend of “Shifting Private Equity Appetite.” Private equity seems to now be less interested in “low-growth, late-stage, on-premise software businesses” like Informatica LLC (NASDAQ: INFA) or Tibco Software Inc. (NASDAQ: TIBX), and more drawn toward “younger, higher-growth SaaS businesses.”

This trend could be a reflection of “moderating growth rates and valuations in spaces whose strategic buyers have already made their moves,” Murphy concluded.

Latest Ratings for MKTO

DateFirmActionFromTo
Jun 2016DowngradesMarket OutperformMarket Perform
Jun 2016DowngradesOutperformMarket Perform
Jun 2016DowngradesBuyNeutral

View More Analyst Ratings for MKTO
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