After acquisition rumors about Workday (WDAY.US), KeyBanc lists potential software industry acquisition targets: HubSpot (HUBS.US) and Five9 (FIVN.US) are included.

Zhitong Finance APP has learned that KeyBanc analysts believe, after last week's reports that Silver Lake is in talks to acquire Workday (WDAY.US), companies such as HubSpot (HUBS.US), Five9 (FIVN.US), Asana (ASAN.US), Netskope (NTSK.US), and GitLab (GTLB.US) could become the next batch of potential acquisition targets.

KeyBanc analysts Jackson Ader, Jason Celino, Devin Au, and Eric Heath further listed, in a Monday report, several potential acquisition targets highly watched by private equity institutions, including Zeta Global (ZETA.US), RingCentral (RNG.US), GitLab, Commvault Systems (CVLT.US), Varonis Systems (VRNS.US), Elastic NV (ESTC.US), and Dynatrace (DT.US).

Reportedly, influenced by news of acquisition talks, Workday’s share price surged 18% last Thursday. It was stated that Silver Lake and Workday have been in discussions about a potential deal for several months, and Silver Lake may bring in other investors to co-finance the transaction. After this round of gains, Workday’s market value has reached $49 billion. If the deal is ultimately completed, it would be one of the largest mergers and acquisitions in the software industry’s history, especially rare in the private equity space.

KeyBanc analysts stated in the report, "As companies are shifting toward consumption-based revenue models, this process can be quite complex, but if pursued outside of the public markets, it could become more efficient and more rapid."

They added, "From a valuation perspective, even with recent gains in the software sector index, these mid-sized companies’ market capitalizations remain far below levels of one or two years ago, so total deal values can still remain relatively modest."

Regarding the future trajectory of the software industry, several analysts believe that this development may bring both positive and negative impacts.

In a report last Thursday, KeyBanc’s Celino pointed out, "On the positive side, this deal may set a price floor for other potential acquisition targets that have been waiting for private equity capital to step in. On the negative side, it may also signal that the shock of artificial intelligence (AI) is even more intense than previously expected, possibly reflecting that business transformation is fraught with difficulties or that demand is weakening—so much so that SaaS leaders like Workday and founders such as Aneel ultimately choose to 'yield' to the AI wave."