2018 Key Highlights

  • The industry’s largest transaction in 2018 was IBM’s announced acquisition of Red Hat, which provides open-source software products to the enterprise community, for $32.95 billion.
  • Strategic acquisitions represented 80 percent of total volume and 69 percent of total value, respectively.

2018 Key Trends

  • Total transaction volume in 2018 decreased by five percent over 2017, from 4,634 to 4,423.
  • As for the industry’s three horizontal markets, Online & Mobile volume increased by three percent; Software volume remained about constant; and Media & Marketing volume declined by 11 percent.
  • Total transaction value in 2018 increased by 25 percent over 2017, from $302.85 billion to $378.62 billion.
  • The median revenue multiple rose from 2.0x in 2017 to 2.4x in 2018. The median EBITDA multiple improved from 10.7x in 2017 to 12.0x in 2018.

M&A Market Overview

Berkery Noyes tracked 13,523 Information Industry transactions between 2016 and 2018, of which 2,778 disclosed financial terms, and calculated the aggregate value to be $915.70 billion. Based on known transaction values, we project values of 10,745 undisclosed transactions to be $197.50 billion, totaling $1.13 trillion worth of transactions tracked over the past three years.

Disclosed median enterprise value multiples for all segments combined in this report during the last 36 months were 2.2x revenue and 11.5x EBITDA.

Out of 13,523 deals tracked by Berkery Noyes between 2016 and 2018, transactions valued at $160 million and above garnered a median enterprise value multiple of 3.8x revenue. In contrast, companies with transaction values between $10 million and $20 million captured a median enterprise value multiple of 1.6x revenue.