NEW YORK — January 9, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2018 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity in the Online and Mobile Industry during 2018 and compares it with data covering 2016 and 2017.
According to Berkery Noyes’ latest research, volume increased three percent on a year-to-year basis. Strategic volume remained about constant, whereas private equity backed volume improved 20 percent. Aggregate deal value almost doubled, from $104.98 billion to $205.95 billion. This followed a 15 percent rise from 2016 to 2017.
The median revenue multiple year-over-year increased from 2.0x to 2.5x, while the median EBITDA multiple moved upward from 11.5x to 12.1x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 1.7x revenue, compared to 2.4x revenue for those in the $20-$80 million range and 3.9x revenue for those in the $80 million and above range.
The number of deals in the consumer mobile application subsector increased six percent over the past year. Notable mobile-based transactions during 2018 included:
- Chinese e-commerce platform Meituan’s announced acquisition of Mobike, a bike sharing company that allows users of its mobile app to reserve and unlock bikes, for $3.4 billion;
- PayPal’s announced acquisition of iZettle, a mobile payments company used by small businesses, for $2.2 billion;
- GrubHub’s announced acquisition of LevelUp, an analytics, loyalty, and rewards-based mobile platform that connects restaurants and guests, for $390 million;
- Landcadia Holdings’ acquisition of Waitr, an on-demand food ordering and delivery service, for $308 million;
- Zynga’s acquisition of Gram Games, a mobile game developer with studios in London and Istanbul, for $250 million; and
- Walmart’s announced acquisition of Cornershop, an online marketplace for on-demand delivery from supermarkets, pharmacies and specialty food retailers, for $225 million.
The E-Commerce segment saw volume decrease four percent on a yearly basis. Notable E-Commerce transactions during 2018 included Walmart’s acquisition of a majority stake in Flipkart Online Services, an e-commerce marketplace based on India, for $16 billion; Alibaba Group’s announced acquisition of Ele.me, an online delivery and local services platform in China, for $5.42 billion; Adobe Systems’ acquisition of Magento, which operates a digital commerce platform and offers digital and physical shopping integration solutions, for $1.68 billion; and Amazon’s announced acquisition of PillPack, an online pharmacy, for $753 million.
Transaction activity in the E-Marketing & Search segment gained five percent over the past year. Notable E-Marketing & Search deals during 2018 included Adobe Systems’ acquisition of Marketo, a cloud platform for B2B marketing engagement, for $4.75 billion; SAP America’s acquisition of CallidusCloud, which offers cloud-based sales, marketing, learning, and customer experience solutions, for $2.43 billion; Siris Capital Groups’ acquisition of Web.com, a domain name registration and web development services company, for a reported purchase price of approximately $2 billion; and AT&T’s acquisition of AppNexus, an ad tech platform, for $1.6 billion.
According to Vineet Asthana, Managing Director at Berkery Noyes, “Along with strong market growth, there are movements afoot related to converging communications technologies, content distribution, advertising, search and media. This all suggests significant developments and investments ahead.”
As for other sectors covered in the report, volume in the Communications segment increased seven percent on a yearly basis. Notable segment transactions over the past year included Microsoft’s announced acquisition of GitHub, which provides code hosting services that allow developers to build software for open source projects, for $7.5 billion; Searchlight Capital Partners’ announced acquisition of Mitel Networks Corporation, an enterprise communications and IT telephony company, for $2.03 billion; and CVC Capital Partners’ announced acquisition of ConvergeOne, a global IT and managed services provider of collaboration and technology solutions, for $1.8 billion.
Meanwhile, deal activity in the E-Content segment stayed about the same year-over-year. Transaction volume in the SaaS & Cloud segment increased eight percent and retained its position as the industry’s most active sector.
A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR FULL YEAR 2018 is available at the Berkery Noyes website.