2019-07-03 Berkery Noyes Releases Online and Mobile Industry M&A Report For Half Year 2019

NEW YORK — July 3, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2019 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2019 and compares it with the four previous six-month periods from 2017 to 2018.

Total transaction volume remained nearly constant on a half year basis. Aggregate industry value decreased 23 percent, from $101.75 billion to $78.40 billion. The median revenue multiple shifted slightly from 2.7x in second half 2018 to 2.6x in first half 2019, while the median EBITDA multiple also moved modestly from 12.2x to 11.7x. Over the last two-and-a-half years, deals in the $10-$20 million range received a median enterprise value multiple of 1.9x revenue, compared to 2.6x revenue for those in the $20-$80 million range and 4.5x revenue for those in the $80 million range and above.

The industry’s largest transaction year-to-date was Uber’s announced acquisition of its Middle Eastern rival Careem for $3.1 billion. Uber is acquiring Careem’s mobility, delivery, and payments business across the greater Middle Eastern region.

The number of transactions in the mobile application subsector decreased eight percent during the half year period, with a total of 202 acquisitions in first half 2019. This followed a 13 percent rise in second half 2018. As for specific vertical markets, notable mobile-based deals in the Healthcare market year-to date included:

• Hill-Rom’s announced acquisition of Voalte, a HIPAA-compliant, shared smartphone alternative for caregiver communication, for $180 million;
• Cardinal Health’s acquisition of mscripts, which enables a pharmacy’s customers to manage their prescriptions and related health information directly from their mobile device;
• McKesson’s acquisition of Echo, a U.K. startup that offers an app to help people manage their medication and order repeat NHS prescriptions for delivery;
• Medscape’s acquisition of QxMD Software; a learning technology company that delivers mobile decision point tools and personalized learning solutions for physicians and health care professionals; and
• Philips Electronics’ acquisition of Medumo, a developer of patient navigation and engagement solutions.

Deal volume in the E-Marketing & Search segment decreased 13 percent in first half 2019, returning to its first half 2018 level. Notable segment transactions year-to-date included McDonald’s announced acquisition of Dynamic Yield, an AI-powered platform that delivers individualized experiences at various customer touchpoints, for $300 million; Cision’s acquisition of TrendKite, a digital PR platform, for $221 million; and Trax’s acquisition of Shopkick, a shopping rewards app, for $200 million.

Regarding other sectors covered in the report, transaction activity in the E-Content segment improved 16 percent in first half 2019, making it the sector with the largest gain during the half year period. The number of deals in the SaaS & Cloud segment improved ten percent on a half year basis. Meanwhile, volume in the Communications segment remained constant in first half 2019. M&A activity in the E-Commerce segment decreased eight percent on a half year basis. However, this marked a 16 percent gain over first half 2018.

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2019 is available at the Berkery Noyes website.