NEW YORK — January 22, 2013 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2012 mergers and acquisitions trend report for Private Equity in the Information Industry.
The report analyzes M&A activity in the private equity market during 2012 and compares it with data covering 2010 and 2011. It features transactions made by financially sponsored acquirers within the Information Industry, including purchases made by subsidiaries or platforms of private equity firms.
Financially sponsored M&A in the Information Industry improved 13 percent over the past twelve months and 34 percent relative to 2010. In contrast, transaction volume in the Information Industry as a whole, including deals completed by strategic acquirers, underwent only a three percent gain between 2011 and 2012.
The median revenue multiple in the report declined from 1.8x in 2011 to 1.4x in 2012, whereas the median EBITDA multiple increased from 9.1x to 9.7x. At the same time, aggregate transaction value rose from $36.74 billion to $40.79 billion, an 11 percent improvement. Seven of the report’s top ten highest value deals in 2012 occurred during the second half of the year.
Although no private equity information deals met the $3 billion threshold in 2011, there were three such acquisitions in 2012. The Carlyle Group was involved in two of these transactions, making it the largest private equity acquirer for the year. The leading private equity acquirer in the Information Industry based on value between 2010 and 2012 was Advent International. Advent accounted for an estimated $7.55 billion paid in transaction value throughout the past three years.
In the Media and Marketing portion of the Information Industry, financial deal value rose from 23 percent of the sector’s value in 2011 to 36 percent of sector value in 2012. This was attributable in part to The Carlyle Group’s acquisition of Getty Images for $3.30 billion – the report’s most sizeable transaction – as well as Permira’s acquisition of Ancestry.com for $1.44 billion.
Vista Equity Partners, with 12 transactions, was the most active financial sponsor in the Information Industry in 2012. Vista’s largest industry transaction during the year was its acquisition of financial software company Misys for $2.02 billion. Misys was then merged with Turaz, which was originally known as Thomson Reuters’ trade and risk management software unit before it was acquired by Vista in 2011.
“Private equity firms in 2012 dealt with tax uncertainty, a shifting regulatory landscape, and pressure to deliver favorable returns to investors despite lingering macroeconomic challenges,” said John Shea, Managing Partner at Berkery Noyes. “Nonetheless, the near-term outlook for private equity remains positive across many of the technology based sectors, as indicated by the numbers in our report.” Shea continued, “With more attention being given to compliance and due diligence concerns, the transaction process in general seems to be taking longer than it traditionally has. Yet if valuations continue to align with both buyer and seller expectations, there is the potential for another strong year of private equity activity ahead.”
A copy of the PRIVATE EQUITY IN THE INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2012 is available at the Berkery Noyes website.