The Zhitong Finance App learned that KeyBanc analysts believe that companies such as HubSpot (HUBS.US), Five9 (FIVN.US), ASAN.US (ASAN.US), Netskope (NTSK.US), and GitLab (GTLB.US) are expected to become the next batch of potential acquisitions after reports last week that Silver Lake Capital (Silver Lake) is in negotiations to acquire Workday (WDAY.US).
KeyBanc analysts Jackson Ader, Jason Celino, Devin Au, and Eric Heath further listed some potential acquisition targets that private equity institutions are paying close attention to in a report on Monday, including Zeta Global (ZETA.US), RingCentral (RNG.US), GitLab, Kangwo Systems (CVLT.US), Varonis Systems (VRNS.US), Elastic NV ( ESTC.US) and Dynatrace (DT.US).
According to information, Workday's stock price rose sharply by 18% last Thursday due to reports about takeover negotiations. The report said that Silver Lake Capital and Workday have been communicating about the potential deal in the past few months, and Silver Lake Capital may bring in other investors to jointly finance the transaction. After experiencing this round of growth, Workday's market capitalization has reached $49 billion. If the deal is finalized, it will be one of the largest mergers and acquisitions in the software industry's history, especially rare in private equity transactions.
KeyBanc analysts said in the report: “As companies transition to consumption-based revenue models, this process may be complicated, and if it progresses outside of the open market, it may be more efficient and faster.”
They added: “From a valuation perspective, even with the recent rise in the software industry index, the market value of these medium-sized enterprises is still far below the level of a year or two ago, so the overall transaction amount can remain relatively small.”
As for the future trend of the software industry, many analysts believe that this trend may have both positive and negative effects.
KeyBanc's Celino stated in a report last Thursday: “On the positive side, this deal may set a price bottom line for other potential acquisitions that have been waiting for private equity to enter the market. On the negative side, however, it may also send a signal that the impact of artificial intelligence (AI) is more severe than previously anticipated, and may reflect that business transformation is difficult or demand is weakening — so much so that SaaS leaders like Workday and founders like Aneel are finally choosing to 'surrender' to the AI wave.”