Q1 2018 Information Industry Trends

Transaction volume decreased ten percent over the past three months, from 1,076 to 964. Overall value fell 42 percent, from $111.4 billion to $64.8 billion. This followed a 78 percent increase in Q4 2017, which was due in major part to The Walt Disney Company’s announced acquisition of 21st Century Fox for $66.1 billion.

M&A activity throughout the past five quarters reached its peak in Q1 2017, whereas value reached its zenith in Q4 2017. Eight of the Information Industry’s top ten largest deals in Q1 2018 were completed by strategic acquirers.

The median revenue multiple moved downward from 2.1x to 1.8x, while the median EBITDA multiple remained nearly constant at 10.8x. Disclosed median enterprise value multiples throughout the last five quarters were 2.0x revenue and 10.4x EBITDA.

Regarding the industry’s three broad-based horizontal markets, Software volume declined eight percent in Q1 2018. Transaction volume in the Infrastructure segment underwent an 43 percent increase, which was the horizontal’s largest sector gain. The highest value security related transaction during the quarter was LexisNexis Risk Solutions’ announced acquisition of ThreatMetrix, which provides cloud-based fraud prevention solutions, for $804 million.

In the Online & Mobile horizontal, volume saw a 12 percent quarterly decrease. The E-Content segment experienced a 33 percent gain, which marked a return to its Q3 2017 level. This made it the sector with the horizontal’s largest rise in volume.

As for the Media & Marketing horizontal, volume declined six percent on a quarterly basis. Deal flow in the Internet Media segment rose 25 percent, which was the horizontal’s most improved sector during the quarter.