Tech M&A predictions, software companies most likely to buy: RBC

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  • Two RBC analysts say these stocks are the most likely takeover targets in the software industry.
  • Two major software deals were announced on Monday after two major sales in March.
  • Datto, a company they considered a likely target, immediately accepted a takeover offer.

Just hours after software analysts at RBC said cybersecurity and data backup company Datto Holdings could be a good takeover target, Datto said it had accepted a takeover offer.

It’s a good endorsement of the predictive powers of RBC software analysts Matthew Hedberg and Rishi Jaluria. But the sale of Datto to Kaseya Software for $6.2 billion was just one of two major deals announced on Monday. In the other, private equity firm Thoma Bravo agreed to buy enterprise cybersecurity firm SailPoint Technologies for $6.9 billion.

This follows other major transactions in March. In fact, RBC says $105 billion in software mergers and acquisitions have been announced so far in 2022 – that’s more than in 2019 or 2020, and that would put this year on pace to beat the $250 billion. dollars of transactions in 2021.

Identifying buyout targets in advance can be extremely profitable. Datto stock jumped 21% on Monday, while SailPoint jumped 29% that day. Naturally, this means that investors are increasingly interested in mergers and acquisitions. RBC analysts have therefore published a list of companies they believe are most likely to be bought by a strategic acquirer – that is, a company looking to expand its existing software business – or by a buyer. investment capital.

This list of 16 tech stocks is below, along with comments from the two analysts. In the note, they emphasize that their opinions are not based on direct knowledge that these companies are looking for a sale.

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