NEW YORK — July 11, 2014 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2014 mergers and acquisitions trend report for the Information Industry.
The Information report features companies in the Media and Marketing, Software, and Online and Mobile Industries. It analyzes M&A activity during the first half of 2014 and compares it with the four previous six-month periods from 2012 to 2013.
Total transaction volume rose by four percent since second half 2013. Aggregate value increased 23 percent, from $94.80 billion to $116.92 billion. This also represented a 15 percent rise in volume and a 73 percent gain in value relative to first half 2013. Of note, the peak for volume and value throughout the past two-and-a-half years occurred in first half 2014. In terms of valuations, the median revenue and median EBITDA multiple over the past six months remained nearly constant at 2.0x and 9.3x, respectively.
Regarding the three horizontal markets covered in the report, Online and Mobile transaction volume improved seven percent. The segment with the largest rise in Online and Mobile volume was Communications with a 27 percent increase. Two of the Communications segment’s three largest deals in first half 2014 were located in the consumer mobile application subsector. This consisted of Facebook’s acquisition of WhatsApp for $16 billion and Rakuten’s acquisition of Viber for $900 million.
Deal flow in the overall Media and Marketing horizontal declined three percent. However, the Marketing segment saw volume rise seven percent. The Information Industry’s largest financially sponsored transaction in first half 2014, Leonard Green & Partners, L.P. and CVC Capital Partners’ acquisition of Advantage Sales and Marketing for $4.2 billion, also occurred in the segment. Other high profile Marketing deals thus far in 2014 included Matthews International’s acquisition of brand development company Schawk for $577 million, National CineMedia’s acquisition of out-of-home advertising company Screenvision for $376 million, and Berkshire Partners’ acquisition of consumer focused marketing company Catalina.
The number of transactions in the Software horizontal improved six percent. Niche Software, which is targeted to specific vertical markets, had a 13 percent increase, making it the segment with the largest rise in Software volume. Although volume in the Infrastructure segment declined 18 percent, there was an increase in the segment’s information and cyber-security subsector, from 37 to 44 transactions. FireEye completed two notable related deals year-to-date with the acquisition of Mandiant Corporation for $826 million and nPulse Technologies for $60 million.
As for the Business Software segment, M&A activity rose six percent. There was also an increase in the segment’s business intelligence subsector, from 21 to 35 transactions. Notable deals in the space in first half 2014 included TIBCO Software’s acquisition of Jaspersoft for $185 million and Dell’s acquisition of Statsoft.
“Organizations are increasingly discovering that data quality and management is at the root of many of their most important business issues,” said James Berkery, Chief Information Officer at Berkery Noyes. “Inaccurate or incomplete data promotes inefficiency, inhibits compliance, and diminishes the accuracy of analytical support and other business intelligence tools. Moreover, disparate platforms throughout large organizations pose integration challenges, further exacerbating the issue of data quality and completeness.” Berkery continued, “Companies are also grappling with the challenges and are recognizing the benefits of integrating unstructured and structured data for analysis. As a result, acquirers are showing an interest in tools that facilitate content integration, search, text analytics, portals, metadata, and master data management.”
A copy of the INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2014 is available at the Berkery Noyes website.