NEW YORK — April 17, 2014 — Berkery Noyes, an independent mid-market investment bank, today released its Q1 2014 mergers and acquisitions trend report for the Information Industry.

The Information report features companies in the Media and Marketing, Software, and Online and Mobile Industries. It analyzes M&A activity during Q1 2014 and compares it with the past four quarters.

According to Berkery Noyes’ latest data, transaction volume in the Information Industry experienced a two percent uptick on a quarter-to-quarter basis. Aggregate deal value increased 44 percent, from $47.3 billion to $67.9 billion. The median revenue multiple remained constant at 2.2x, while the median EBITDA multiple increased from 9.6x to 11.0x.

Regarding the three horizontal markets in the report, the Online and Mobile portion of the Information Industry saw a five percent increase in volume. This included a 16 percent rise in the E-Marketing and Search segment, from 147 to 171 transactions. Lithium Technologies’ $200 million acquisition of Klout, which measures social media engagement, was one example of acquirers showing interest in social graphing technologies. Meanwhile, volume in the mobile application subsector increased nine percent, from 104 to 113 transactions. Facebook’s acquisition of mobile messaging application Whatsapp for $16 billion accounted for nearly one-quarter of the Information Industry’s aggregate value in Q1 2014.

In the Software horizontal market, volume declined four percent throughout the past three months. Nonetheless, this represented a 14 percent increase compared to Q1 2013. Continuing a trend from 2012 and 2013, both Dell and IBM completed software acquisitions in Q1 2014 with a focus on big data. Dell acquired StatSoft, which provides predictive analytics and data mining solutions; while IBM acquired Cloudant, a database-as-a-service (DBaaS) that will help expand IBM’s big data, cloud computing, and mobile offerings.

Deal activity in the Media and Marketing horizontal was relatively consistent with a three percent rise in Q1 2014. Total Media and Marketing deal value also moved slightly upward, from $25.1 billion to $25.7 billion. Transaction volume in the Entertainment Content segment increased 14 percent, from 42 to 48 transactions.

Financially sponsored deal volume in the Information Industry, after remaining nearly constant from Q3 2013 to Q4 2013, improved seven percent in Q1 2014. Five of the industry’s top ten highest value transactions in Q1 2014 were also backed by financial sponsors. In terms of specific verticals, there were two private equity transactions in the Education market that reached the $1 billion threshold during the quarter. This consisted of Charterhouse Capital Partners’ $2.3 billion acquisition of SkillSoft, which offers cloud-based learning solutions for enterprises and governments; and Hellman & Friedman’s $1.1 billion acquisition of Renaissance Learning, a K-12 assessment and analytics company.

As for other areas of the Information Industry, management consulting firms have been showing interest in data analytics, web/mobile development, and digital marketing services companies over the past several quarters. One example during Q1 2014 was KMPG’s acquisition of Cynergy Systems, which specializes in mobile and digital strategy, design, and development. Additional transactions in this space completed in the latter part of 2013 were KPMG’s acquisition of Link Analytics, PWC’s acquisition of BGT Partners, and Deloitte’s acquisition of Banyan Branch.

“Some of the key factors prompting management consulting firms to consider M&A in this space are talent and the desire to expand their offerings,” said James Berkery, Chief Information Officer at Berkery Noyes. “In addition, it seems that many digital marketing companies are also embracing more of a consulting type model themselves. We are seeing this come to fruition with some of the acquisitions made by Publicis and WPP, in that the lines of distinction between technology and creative services have become increasingly blurred.” Berkery continued, "Soon I believe that tech-enabled services will be in the cards for many large advisory services firms. As an example we have been hard at work on software solutions to better integrate, engage and inform our clients, industry colleagues, and friends."

A copy of the INFORMATION INDUSTRY M&A REPORT FOR FIRST QUARTER 2014 is available at the Berkery Noyes website.