Storage M&A Highlights:

• While total deal consideration jumped up to $23.5B (primarily due to the announced Toshiba Memory transaction for $18.0B), the total number of transaction dropped to 27 from 34 in 2016.
• Of the 27 announced transactions, 15 were led by private buyers with 12 companies bought by public entities. Of the 15 private buyers, 9 of them were private equity shops. This is the first time since we started our annual reports in 2005 that private led transactions beat public buyers.
• Going into 2018, we see a broader range of public buyers entering the storage M&A market but expect private and private equity led transactions to still comprise at least half of the deals.
• For the second year in a row, we saw very few early stage companies being acquired at attractive valuations. Instead, the M&A market was driven by later stage companies getting acquired at “ho-hum” median price to revenue multiples in the 2.5X range. This shift was driven by a buyer base that that now applies stricter valuation methodologies and is willing to be patient and disciplined on M&A until the new shiny start-up actually shows market validation in this competitive market space.  
• We see 2018 continuing this trend with deals in the 2X to 5X P/R multiple range with few possibly trending above the 10X range.

For the full report, contact John Rotchford, Managing Director, at john@sasillc.com