NEW YORK — October 7, 2013 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2013 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the three-month period and compares it with data for the six previous quarters.

Total volume experienced an uptick, from 541 to 549 transactions. At the same time, deal value declined four percent, from $17.0 billion to $16.3 billion. The median revenue multiple moved slightly from 2.3x to 2.2x, while the median EBITDA multiple rose from 10.0x to 12.0x. Yahoo! remained the industry’s most active acquirer with 20 transactions year-to-date. Seven of these deals occurred in third quarter 2013.

The SaaS & Cloud segment underwent a five percent decrease in volume on a quarter-to-quarter basis. However, the number of SaaS & Cloud deals throughout the first three quarters of 2013 increased 11 percent compared to the same timeframe in 2012. In addition, M&A activity in both the E-Commerce and E-Content segments increased 13 percent over the past three months. One notable acquirer in the E-Commerce segment was Target, which acquired online beauty product retailer Dermstore. Target also acquired and in first quarter 2013.

Regarding the E-Marketing & Search segment, deal volume remained about constant on a quarterly basis. An ongoing trend in the segment pertains to possible monetization opportunities from social media monitoring, especially as it relates to television. Along these lines, Twitter acquired Trendrr in third quarter 2013 as well as BlueFin Labs earlier in the year. There were also several high value deals that involved video advertising platforms in third quarter 2013, such as Extreme Reach’s acquisition of Digital Generation’s television business for $485 million and AOL acquired for $405 million. 

Moreover, there were two high profile mobile advertising transactions during the quarter, each of which highlights the growing interest in real-time bidding solutions. Within this subset, Twitter acquired mobile ad serving platform MoPub for an estimated $350 million while Millennial Media acquired mobile ad network Jumptap for $239 million. Another similarity between the two deals is that they were both all stock acquisitions.

“The advertising marketplace is undergoing a transformation,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “Digital video is impacting traditional media buying practices, social media networks are looking to effectively monetize digital ads, and mobile marketers are trying to engage their audience with more targeted offerings. These are just some of the factors that are fostering a positive environment for M&A in the sector going forward.”

As for other areas covered in the report, the number of transactions involving consumer mobile applications decreased 38 percent in the quarter. This came in the aftermath of a 26 percent increase between first and second quarter 2013. Instagram completed its first ever acquisition in third quarter 2013 with Luma, a video sharing mobile application. Meanwhile, notable acquirers such as Apple have been showing an interest in mobile applications that focus on mapping technology. Apple acquired Locationary, a crowdsourced data company, as well as transit application-makers Hopstop and Embark in third quarter 2013. This followed Apple’s acquisition of indoor mapping company Wifislam in first quarter 2013. Google also made a major move in the space several months ago, acquiring social road intelligence application Waze for $966 million in second quarter 2013.

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR THIRD QUARTER 2013 is available at the Berkery Noyes website.