NEW YORK — July 18, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2018 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2018 and compares it with the four previous six-month periods from 2016 to 2017.

Total transaction volume declined one percent on a half year basis. Aggregate industry value more than doubled, from $50.83 billion to $106.1 billion. Of note, there were four transactions in first half 2018 above the $5 billion threshold, compared to none in all of 2017. There were also 25 deals with disclosed values that reached the $1 billion threshold in first half 2018, compared to eight in second half 2017 and five in first half 2017. The peak for volume over the last 30 months occurred in first half 2017, whereas value reached its zenith in first half 2018.

M&A activity in the E-Commerce segment decreased seven percent in first half 2018. Upon examination of value, five of the top ten hig¬hest value deals occurred in the segment, making it the best represented sector in the top ten list. Notable segment transactions year-to-date included Walmart’s announced acquisition of a majority stake in Flipkart Online Services, an e-commerce platform based in India, for $16 billion; Alibaba Group’s announced acquisition of, an online delivery and local services platform in China, for $5.42 billion; PayPal’s announced acquisition of iZettle, a mobile payments company used by small businesses, for $2.43 billion; Adobe’s 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 $1 billion.

The number of transactions in the mobile application subsector increased four percent during the half year period, with a total of 189 acquisitions in first half 2018. As for specific vertical markets, mobile-based deals year-to date in the Healthcare industry included Allscripts’ acquisition of HealthGrid, a mobile enterprise patient engagement platform business, for $60 million (plus a $50 million earnout); and Fitbit’s announced acquisition of Twine Health, a health management platform that helps people manage chronic conditions. In terms of the Education industry, mobile-based deals included Microsoft’s acquisition of Flipgrid, which allows students to record and share videos; and Civitas Learning’s acquisition of ClearScholar, a student engagement platform used by colleges and universities.

There were also several high profile, non-traditional acquirers in the mobile space in first half 2018. This included audio equipment manufacturer Bose’s acquisition of Detour, which provides users with narrated walks through cities; footwear and apparel company Nike’s acquisition of Invertex, a computer vision company that leverages 3D scanning to improve e-commerce experiences; and the acquisition of Pocket Casts, a podcast app, by a group of public radio companies that includes NPR.

Regarding other sectors covered in the report, transaction activity in the E-Content segment improved 15 percent in first half 2018, making it the sector with the largest gain during the half year period. Deal activity in the Communications segment improved eight percent in first half 2018. Meanwhile, volume in the SaaS & Cloud segment declined four percent on a half year basis.

Deal volume in the E-Marketing & Search segment decreased nine percent in first half 2018. This followed a seven percent rise in second half 2017. One of the segment’s most high profile transactions year-to-date was AT&T’s announced acquisition of AppNexus, an ad tech platform, for a reported $1.6 billion. Among a wide array of offerings, AppNexus is known for its sell-side platform (SSP) that provides publishers with cloud-based software to automate ad sales. The company also operates a programmatic, digital advertising marketplace that connects ad placements and audiences. With this acquisition, AT&T is looking to strengthen its digital video and television advertising capabilities. It may also be a disruptive force in a marketplace that has been largely dominated by Facebook and Google. Also of note, AT&T completed its acquisition of Time Warner during the half year period.

“Companies that can differentiate their offerings from the average digital and mobile-based ad tech players are performing well,” said Vineet Asthana, Managing Director at Berkery Noyes. “Potential acquirers include large telecommunications firms and offline data providers that are looking for a digital platform.” Asthana continued, “Many advertising networks without cutting edge programmatic technologies also want to expand their suite of solutions to help better automate their marketing capabilities.”

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2018 is available at the Berkery Noyes website.