2013-07-11 Berkery Noyes Releases Online and Mobile Industry M&A Report For Half Year 2013

NEW YORK — July 11, 2013 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2013 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2013 and compares it with the four previous six-month periods from 2011 to 2012.

Deal volume increased seven percent relative to the prior half year period, from 953 to 1,015 transactions. However, value decreased 29 percent, from $32.54 billion in second half 2012 to $23.16 billion in first half 2013. The median revenue moved from 2.3x to 2.1x, while the median EBITDA multiple increased from 10.0x to 16.0x.

Yahoo!, with 13 transactions, was the industry’s most active acquirer in first half 2013. Aside from its $1.10 billion acquisition of Tumblr, Yahoo! has mainly focused on small, mobile-based transactions this year. Tumblr was Yahoo!’s largest deal in the Online & Mobile Industry since 2003, when it acquired search and internet advertising company Overture Services for $1.63 billion.

SaaS & Cloud was the most active market segment and underwent a 15 percent increase in volume, totaling 291 transactions year-to-date. M&A activity in the Communications segment improved 22 percent since second half 2012, making it the sector with the largest half-to-half year increase. One notable Communications transaction in first half 2013 was Dropbox’s acquisition of mobile email application Mailbox.

In addition, acquirers are looking to add mobile solutions that aggregate relevant content in relation to individual users, as news is shared in real-time. There were several deals over the past six months that focused on news summary and content sharing, such as LinkedIn’s acquisition of Pulse for $90 million, Google’s acquisition of Wavii for $30 million, and Yahoo!’s acquisition of Summly for $30 million. “Mobile continues to be a strong driver of M&A activity in the information marketplace,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “Content delivery methods are evolving, and acquirers in general are showing more interest in semantic technologies that improve the end-user experience.”

Another ongoing industry trend was the prevalence of acqui-hires and deals with a significant talent acquisition component. Examples of such transactions in first half 2013 were Pinterest’s acquisition of Livestar, an application that offers personalized recommendations for movies, music, and restaurants; and LinkedIn’s acquisition of Maybe, a mobile polling startup. Yahoo! and Twitter each made several acquisitions during first half 2013 as well with the main intent to acquire talent rather than intellectual property.

As for the E-Marketing & Search segment, volume increased 17 percent on a half-to-half year basis. The largest transaction in first half 2013, both in the overall industry and the E-Marketing & Search segment, was Salesforce.com’s acquisition of digital marketing provider ExactTarget for $2.25 billion. The enterprise cloud computing company also acquired Edgespring, a business intelligence and analytics startup, for $80 million. Salesforce.com has shown a propensity to expand its offerings through high value M&A deals, as made evident by its acquisition of Buddy Media in 2012 for $745 million and Radian6 Technologies in 2011 for $298 million. Both of these companies were eventually combined to form an integrated social media marketing platform.

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2013 is available at the Berkery Noyes website.