After rumors of Workday (WDAY.US) acquiring companies, KeyBanc has highlighted a list of potential acquisition targets in the software industry: HubSpot (HUBS.US) and Five9 (FIVN.US) are included.

KeyBanc analysts believe that following last week's reports that Silver Lake is negotiating to acquire Workday (WDAY.US), companies such as HubSpot (HUBS.US), Five9 (FIVN.US), Asana (ASAN.US), Netskope (NTSK.US), and GitLab (GTLB.US) are expected to become the next potential acquisition targets. KeyBanc analysts Jackson Ader, Jason Celino, Devin Au, and Eric Heath further listed several potential acquisition targets highly focused on by private equity institutions in a report on Monday, including Zeta Global (ZETA.US), RingCentral (RNG.US), GitLab, Commvault Systems, Inc. (CVLT.US), Varonis Systems (VRNS.US), Elastic NV (ESTC.US), and Dynatrace (DT.US). It is reported that, influenced by reports of the acquisition negotiations, Workday's stock price surged 18% last Thursday. Reports indicate that Silver Lake has been communicating with Workday over a potential deal in recent months, and Silver Lake may bring in other investors to jointly finance the transaction. Following this round of increases, Workday's market value has reached $49 billion. If the deal is finalized, it would be one of the largest mergers and acquisitions in the software industrys history, particularly rare in the private equity transaction space. KeyBanc analysts stated in their report: As companies increasingly shift towards consumption-based revenue models, this process may be somewhat complex, and moving forward outside the public market may prove to be more efficient and faster. They added: From a valuation perspective, even though the software industry index has recently risen, the market values of these mid-sized companies are still far below the levels of one to two years ago, so the overall deal amounts can still remain relatively small. Regarding the future trend of the software industry, several analysts believe this trend may bring both positive and negative impacts. KeyBanc's Celino pointed out in last Thursday's report: On the positive side, this deal may set a price floor for other potential acquisition targets that have been waiting for private capital to enter. However, on the negative side, it may also signal that the impact of artificial intelligence (AI) is more severe than previously anticipated, possibly reflecting significant challenges in business transformation or a weakening of demandleading to scenarios where SaaS leaders like Workday and founders like Aneel ultimately choose to 'surrender' to the AI wave.