Q3 2017 Information Industry Trends

Q3 2017 KEY HIGHLIGHTS

• The Advisory Board Company was involved in two of the Information Industry’s top ten largest deals in Q3 2017. Vista Equity Partners announced its acquisition of The Advisory Board Company’s education business, which includes Royall & Company, for $1.6 billion; and Optum announced its acquisition of The Advisory Board Company’s healthcare business for $1.3 billion.

Q3 2017 KEY TRENDS

• Total transaction volume in Q3 2017 declined by nine percent over Q2 2017, from 1,188 to 1,085. However, volume year-to-date improved by two percent compared to the same timeframe in 2016.
• As for the industry’s horizontal markets on a year-over year basis, Media & Marketing volume gained four percent; Software volume remained about constant; and Online & Mobile volume fell by four percent.
• Total transaction value in Q3 2017 increased by five percent over Q2 2017, from $55.6 billion to $58.4 billion.

MULTIPLES & VALUE TRENDS

• The median revenue multiple from 2016 through the 1st 3 Quarters of 2017 decreased slightly, from 2.1x to 1.9x.
• The median EBITDA multiple from 2016 through the 1st 3 Quarters of 2017 shifted downward, from 11.3x to 10.4x.

TOP TEN DEALS THROUGH Q3 2017

The top ten deals by value have seen one new addition since our half year report: Discovery Communications’ announced acquisition of Scripps Networks Interactive, a developer of lifestyle content for television and the Internet, for $11.9 billion. This acquisition represented about one-fifth of aggregate Q3 2017 transaction value.

KKR’s Internet Brands’ announced acquisition of WebMD Corporation, an online health information provider, for $2.8 billion just missed the threshold for inclusion in the top ten list.