Adjacent is still an industry you do not run.
Strategic acquirers took their largest share of software deals in nine years and paid the widest premium in a decade. Inside an industry you operate in, the premium is defensible. Outside it, the premium is the risk.
Discuss acquisition criteriaof announced software deals in 2025 went to strategic acquirers, the highest share in nine years. In the first quarter of 2026 it was 76 percent.
An M&A advisory firm’s global software sector updates, February 16, 2026 and May 15, 2026: 2,897 announced transactions in 2025.
You are paying the premium. Market extension is the deal type that returns the least.
Two years after close, deals that extend into a new market rank last of five deal types on value created.
An M&A advisory firm’s global software sector update, February 16, 2026. A professional services firm’s study of 682 public-to-public deals of $100M or more announced 2012 to 2022, published October 31, 2025; that study classified each deal by type using an AI tool, and its market extension and diversification groups hold 47 and 28 deals, so the direction is more reliable than the decimal. SRS Acquiom, 2026 M&A Deal Terms Study, deals closed 2020 to 2025.
Six things the desk does before a name reaches you.
Adjacent is still an industry you do not run. The desk brings the sector knowledge the premium assumes you have.
Outside an industry you operate in, the premium is the risk. The desk brings the operating knowledge of the sector you are entering.
Who the target’s customers are, how they buy, and what is happening to their own industry, read before corporate development prices the synergy.
Relationships built before a banker is hired, so a strategic buyer is already a known name when the owner decides.
Revenue reconciled to bank deposits, every adjustment marked supported or unsupported, before the letter is priced.
Contracts with consents, customers shared with your own, systems and people that will not transfer, found before the letter.
Each business scored and ranked against criteria and weights you approved. You decide which to pursue.
What is on the record before you price it.
| Question | How it is usually answered | How the desk answers it |
|---|---|---|
| Is the sector what the deck says it is? | An analyst’s market study. | The sector mapped from its companies, its buyers and its broken deals, by people who have operated in it. |
| What does the target earn? | Adjusted earnings, as presented. | Every adjustment marked supported or unsupported, with the document that decides it. |
| Will the customers stay after the deal? | A synergy assumption. | Contract terms, consent clauses and concentration, customer by customer, before the premium is set. |
| What is the premium buying? | Market extension, by the strategy. | The published record: market extension returns the least of the deal types. The desk reads the specific target against it. |
| What transfers? | Counsel’s review, in week six. | Every contract, license and permit with a consent requirement, listed before the letter. |
| What ended the last deal in this sector? | Nobody asks. | The Dead Deal Notes, coded by sector, stage and finding. |
Each engagement starts with your criteria and a clearly defined sector.
Your acquisition criteria and one clearly defined sector. The work covers one sector at a time, with scope agreed in writing before it begins.
The software businesses in that sector, scored and ranked against criteria and weights you approved. You decide which to pursue.
Built ahead of a process. Nothing about a company reaches you without its owner’s permission.
Each opportunity assessed before a letter of intent, so you are pricing against the findings instead of renegotiating after them.
Plain answers, then a conversation if you want one.
Why is the premium the risk outside my industry?
Because the synergy that justifies it depends on customers, contracts and people you have not operated with. The published record puts market extension at the bottom of the deal types for returns. The desk reads the adjacent sector the way an operator in it would.
What does criteria on file ask of me?
Your criteria, confirmed with you each quarter. A retained search covers one sector at a time, with scope agreed in writing.
Can corporate development use the desk for one target?
Yes. The evidence on a single target, before the letter is priced, is a separately scoped engagement.
Do you represent the seller as well?
Never on the same transaction. Capital Row acts for one side, under a scope agreed in writing.
What is the first conversation?
Which market you are entering, and the timeline. Read by a person.
The end-market read a corporate development team cannot staff for.
The first conversation is about your criteria and the desks that match them.
Each engagement starts with your acquisition criteria and a clearly defined sector. Scope is agreed in writing before any work begins.
The software businesses in that sector that match your acquisition strategy.
Built ahead of a process. Nothing about a company reaches you without its owner’s permission.
Each opportunity assessed before a letter of intent, with revenue reconciled to bank deposits and each adjustment marked supported or unsupported.
Put your criteria on file.
See the rest of your market.
Capital Row helps buyers see more of their own market, with the financials traced to source before the letter of intent.
Read by a person.