February 18, 2014 INFORMATION INDUSTRY M&A VOLUME STAYS CONSISTENT IN 2013

Berkery Noyes’ latest research showed that the Information Industry’s median revenue multiple increased from 1.8x in 2012 to 2.1x in 2013, while the median EBITDA multiple moved slightly from 9.9x to 10.3x. There was a two percent uptick in deal volume, with a total of 3,613 transactions in 2013. Deal value in the Information Industry gained 17 percent on a year-to-year basis, from $157.25 billion to $184.63 billion. The announced merger of Publicis and Omnicom accounted for 11 percent of the industry’s aggregate transaction value in 2013. 

Regarding the three horizontal markets in the report, volume in the Media and Marketing portion of the Information Industry remained nearly constant. As for the Software horizontal, deal activity improved two percent throughout the past twelve months.

In terms of the Business Software segment, which consists of software designed for general business practices and not specific niche sector needs, the most active acquirer over the three years covered in the report was Oracle with 14 transactions. Three of these deals occurred in 2013, the largest of which was Oracle’s acquisition of Responsys, a provider of marketing software, for $1.39 billion.

Meanwhile, the Online and Mobile horizontal market saw an eight percent increase in volume between 2012 and 2013. One notable related acquirer was GoDaddy.com, which itself was acquired by a private equity consortium back in 2011. GoDaddy’s acquisitions during the past year indicate that the domain provider is looking to expand beyond its core infrastructure and Web hosting business. Along these lines, GoDaddy acquired Locu, a local listing service, for $70 million; Ronin, an online invoicing company; and Mdot, a mobile application that assists small businesses with creating websites.

“A rising tide of private equity capital, renewed appetite for acquisitions among strategic information companies, and favorable prospects for corporate profits and economic growth paint a compelling picture for M&A at the moment,” said James Berkery, Chief Information Officer at Berkery Noyes. “Many information companies are also finding ways to diversify their revenue streams, achieve scale, and better deploy their assets, all of which is helping to lay the foundation for another strong year of deal activity ahead.”