NEW YORK — October 15, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2018 mergers and acquisitions trend report for the Information Industry.

The Information report features companies in the Media & Marketing, Software, and Online & Mobile Industries. It analyzes M&A activity during the first three quarters of 2018 and compares it with data for the six previous quarters.

Deal volume in the Information Industry declined four percent over the past three months. Aggregate value fell 21 percent, totaling $88 billion. This followed a 78 percent rise in the second quarter. Regarding valuations, the median revenue multiple from 2017 through the first three quarters of 2018 increased from 2.0x to 2.4x while the median EBITDA multiple moved slightly upward from 10.7x to 11.4x.

As for the horizontal markets in the report, volume in the Online & Mobile component of the Information Industry improved nine percent from second to third quarter 2018. After nearly tripling in the second quarter, aggregate value in the horizontal decreased 44 percent.

M&A activity in the E-Commerce segment increased 26 percent, making it the sector with the horizontal’s largest quarterly gain. Notable E-Commerce deals in third quarter 2018 included Walmart’s announced acquisition of Cornershop, an online marketplace for on-demand delivery from supermarkets, pharmacies and specialty food retailers, for $225 million; and GTY Technology Holdings’ announced acquisition of CityBase, which provides end-to-end payment solutions and digital services to utilities and government agencies, for $160 million.

The number of mobile application deals increased five percent during the third quarter. This followed a 31 percent rise in the second quarter. Mobile transactions by high profile acquirers in third quarter 2018 included GrubHub’s acquisition of LevelUp, an analytics, loyalty, and rewards-based mobile platform that connects restaurants and guests, for $390 million; Electronic Arts’ acquisition of Industrial Toys, an independent game studio that creates mobile games; and Proctor & Gamble’s acquisition of Pressbox, a mobile and web application used for dry-cleaning and laundry services.

Deal flow across the Software horizontal declined five percent on a quarterly basis. Aggregate value rose nine percent, which was the horizontal’s fifth consecutive quarterly increase.

The Business segment, which consists of software designed for general business practices and not specific vertical industries, saw volume decrease four percent in the third quarter. This followed a 31 percent rise in the second quarter. Notable third quarter Business segment deals included Adobe Systems’ announced acquisition of Marketo, a cloud platform for B2B marketing engagement, for $4.8 billion; Fortive’s announced acquisition of Accruent, a cloud-based software company that helps businesses manage their real estate, facilities, and other physical resources, for $2 billion.

M&A activity in the Infrastructure segment declined six percent quarter-over-quarter. Notable Infrastructure deals in third quarter 2018 included Broadcom’s announced acquisition of CA Technologies, a provider of information technology (IT) management software and solutions, for $18.4 billion; Cisco Systems’ announced acquisition of Duo Security, which offers unified access security and multi-factor authentication delivered through the cloud, for $2.4 billion; Siemens’ announced acquisition of Mendix, a low-code application development platform, for $700 million; and Atlassian’s acquisition of OpsGenie, an incident management platform used by DevOps and IT-operations teams to manage critical IT alerts and incidents, for $295 million.

Transaction volume in the Media & Marketing horizontal remained about the same over the past quarter. Aggregate value in the horizontal was also constant.

The number of transactions in the B2B Publishing and Information segment decreased 22 percent. This followed a 49 percent gain in the second quarter. The horizontal’s largest deal in third quarter 2018 was the announced acquisition of Dun & Bradstreet by an investment consortium that includes Thomas H. Lee Partners and CC Capital, for $6.6 billion. Dun & Bradstreet provides commercial data, analytics, and insights for businesses.

“The pace of M&A in the middle market has been steady for the most part, with both mature and high growth companies attracting interest,” said James Berkery, Managing Partner at Berkery Noyes. “Strategic acquirers are actively seeking opportunities to extend their vertical expertise, add value to their existing offerings, and improve their ability to retain customers.”

A copy of the INFORMATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2018 is available at the Berkery Noyes website.