1、European Software Sector Market UpdateHarris Williams|H1 2022European Software H1 2022Several dynamics are contributing towards a rapidly evolving European Software landscape2H1 2022 Observations and Key Trends Executive SummaryHappening in European Software Right NowDespite various macro headwinds(

2、Ukraine conflict,supply chain friction,economic slowdown),fundamental demand drivers for M&A continue to existEuropean Software in particular is considered resilient through the cycle and is therefore continuing to garner strong interest overallMacro EnvironmentRising inflation in Europe is paving t

3、he way for price increases in software,which is aligned with broader market trendsEuropean Software vendors are striving to increase prices to pass through higher costsSoftware Price Increases“Growth-at-all-cost”trend of 2021 has phased out in H1 2022,shifting from high-growth businesses burning mon

4、ey towards a more balanced approach between growth and profitsBuyers are increasingly focused on profitability over ARR growth when considering potential acquisition targetsEnd of“Growth-at-all-Cost”European Software continues to be a highly transactional segment,with a bifurcation between A/A+busin

5、esses versus the rest of the marketA/A+assets continue to receive strong interest commanding scarcity premiums,with valuation levels holding up as fewer high-quality assets come to marketRaising the M&A BarPublic valuations have pulled back,creating attractive take-private candidates that buyers are

6、 looking to take advantage of(e.g.Basware,CAST,EcoOnline and Ideagen)While the IPO market remains cautious,there is a record amount of private equity dry powder and large treasure chests ready to be deployed,albeit with a less active high yield debt marketAttractive Take-Private CandidatesWith the h