Towards 2022, it looked like we were ready for a big year in mergers and acquisitions. This was especially true for enterprise SaaS companies that saw their values decline in late 2021, a trend that continued into this year. Why aren’t we seeing more aggressive mergers and acquisitions and old-fashioned bargain hunting when many software companies can be seen as grossly undervalued?
It’s a reasonable question.
A quick look at a handful of SaaS stocks shows that there are some deals to be had. While Zoom’s value is still a bit rich, maybe at $21 billion, remember that DocuSign has fallen to $10 billion, Dropbox about $7.5 billion, UiPath less than $7 billion, Box rests at just $3 .7 billion in value, and Sumo Logic is valued at less than $1 billion.
Come on folks, because there are bargains to be had, whether you’re one of the usual takeover candidates (Salesforce, Oracle, Microsoft, Amazon) or a private equity investor looking for good values.
It’s not like we haven’t seen any activity. As you probably know, there have been some big deals this year, but with so many SaaS stocks to date, why don’t we see that Lake efficacy? We decided to dig in and see if we could figure it out.
A quick look at 2022 M&A so far
Looking at the sizable mergers and acquisitions this year, the biggest by far is the largest by far Microsoft snatching gaming company Activision/Blizzard for a scintillating $69 billion in an aggressive move, one that might be so aggressive that regulators are concerned. For now, that deal remains in limbo and is far from enterprise SaaS.