Analyst lists 3 reasons why tech M&A may accelerate

Investing.com -- In a note to clients this week, KeyBanc Capital Markets told investors that the reported approach for Workday (NASDAQ: WDAY) by Silver Lake is a reason to revisit the case for a pickup in software dealmaking, laying out three drivers that could catalyze more consolidation.

Analyst Jackson Ader said the firm has expected greater M&A activity for the past couple of years, and while that played out to an extent in 2025, it has not come at the pace anticipated in 2026.

Fears over software's durability have stifled demand, he said, while AI infrastructure investments have "consumed time, cash, and attention from potential public and private equity acquirers."

The first reason KeyBanc cites is the sector's shift from seat-based pricing toward a consumption component, a transition it argues may be easier to execute away from public markets.

"Major changes often better done in the privacy of your own conference room," Ader wrote, drawing a parallel with the move away from perpetual license models during the rise of SaaS.

The second is growth durability, which KeyBanc said cuts both ways. Silver Lake's reported willingness to step into application software points to comfort with Workday's business, while vendors selling at depressed valuations may see the lower-growth environment as more lasting than re-accelerators hope.

The third is valuation. KeyBanc's basket of application software companies is down 26% since the start of 2025, after being off more than 50% in late June.

“What an acquirer would have paid for HUBS two years ago ($50B?) now could gobble up HUBS and about a dozen friends,” the analyst concluded.

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