The SaaS M&A environment is holding strong in 2018 regarding total transaction counts and transaction values driven by some recent large transactions. Rising interest rates can soften market valuations and cash repatriation will provide buyers greater access to capital. This, when combined with the race to command market share, may lead to a very active deal environment through the end of 2018 and into 2019.
- Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
- Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
- Current EBITDA margin exceeds the average of the last 3 years EBITDA margin, a condition that may attract new entrants