Pacific Crest Sees These 5 Software Names As Next Takeover Candidates

This year could be the biggest year for software M&A since 2011. Pacific Crest analyst Rob Owens recently took a close look at how the current software M&A cycle compares to the previous one, which companies are the most likely buyout targets and which companies will be the major buyers.

“Not only do we see the size of the software M&A pool expanding into analytics and security this cycle, we also believe the vertical software market is ripe for consolidation, particularly within healthcare,” Owens explained.

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After going over the pool of potential buyout targets with a fine-tooth comb, the firm came up with its list of the five companies most likely to draw interest:

• Zendesk Inc ZEN
• Shopify Inc SHOP
• Apigee Corp APIC
• Tableau Software Inc DATA
• Imperva Inc IMPV

Last time a market correction in software names sparked an M&A frenzy, buyers acquired more than $25 billion in outside assets while prices were cheap.

During the 2011 M&A cycle, SAP SE (ADR) SAP, Oracle Corporation ORCL and salesforce.com, inc. CRM led the buyers with three acquisitions each.

This cycle, Pacific Crest believes the pool of buyers will be expanded to include names like Alphabet Inc GOOG GOOGL, Microsoft Corporation MSFT and Amazon.com, Inc. AMZN.

Disclosure: The author holds no position in the stocks mentioned.