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ANALYSIS: Software, REITs Stand Out in Slower Global M&A Market

Sept. 15, 2022, 5:39 PM

Currently, most categories of deals—whether grouped by target industry, region, consideration type, or deal structure—are down compared to where they were in last year’s booming mergers and acquisitions market. But deals involving software or real estate investment trusts (REITs) seem to be defying gravity.

A look at the top target industries ranked by aggregate deal volume over the past four years shows that 2022 year-to-date deal activity involving targets in the software and REIT industries stands out for two reasons: both industries have markedly higher deal activity (measured by deal count and dollar volume) than other industries, and they’ve already managed to surpass recent years. Impressively, software deal volume involving targets in that industry has already surpassed 2021’s total. And REIT deals involving targets in that industry have surpassed pre-2021 full-year levels, by both volume and deal count.

Over 2,200 controlling-stake deals involving software targets with an aggregate value of $302.9 billion have been announced this year, already surpassing 2021’s full-year volume of $284.9 billion for this subset of deals. Today’s announcement of Adobe Inc.‘s agreement to acquire Figma Inc. for $20 billion pushed software’s volume this year past last year’s volume. Software’s YTD deal volume has also been significantly bolstered by two mega mega deals—the $67.8 billion acquisition of Activision Blizzard Inc. by Microsoft Corp., and the $70.4 billion acquisition of VMware Inc. by Broadcom Inc.—both of which remain pending.

Year to date, over 4,700 controlling-stake deals involving REITs—which fall under the financial sector—with an aggregate value of $286.8 billion have been announced globally, and are currently pending or completed. The three largest of these deals announced this year have been the $12.8 billion acquisition of American Campus Communities Inc. by Blackstone Inc., announced in April, the $26.3 billion acquisition of Duke Realty Corp. by Prologis Inc., announced in June, and the $13.8 billion acquisition of STORE Capital Corp by a consortium led by GIC Pte. Ltd., which was announced today.

By aggregate dollar volume, both the software and the REIT industries have seen a percentage increase over the same period last year, and are having a buoying effect on their respective sectors.

Bloomberg Law subscribers can find related content on our M&A Deal Analytics resource.

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