NEW YORK — January 12, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2016 mergers and acquisitions trend report for the Information Industry.

The Information report features companies in the Media & Marketing, Software, and Online & Mobile Industries. It analyzes M&A activity during 2016 and compares it with data covering 2014 and 2015.

According to Berkery Noyes’ latest research, deal volume year-over-year remained about constant. Total value in the Information Industry gained 27 percent, from $340.44 billion to $433.89 billion.

The industry’s median revenue multiple from 2015 to 2016 stayed the same at 2.1x, while the median EBITDA multiple moved slightly from 10.9x to 11.3x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 2.0x revenue, compared to 2.2x revenue for those in the $20-$80 million range and 3.3x revenue for those in the $80-$160 million range and above.

Regarding the three horizontal markets in the report, volume in the Media & Marketing portion of the Information Industry declined five percent throughout the past twelve months. Transaction value in the horizontal more than doubled, from $105.67 billion to $272.17 billion. This rise in value was significantly driven by AT&T’s announced acquisition of Time Warner for $105.27 billion, or $85.4 billion excluding net debt. Moreover, there were 18 Media & Marketing acquisitions in 2016 with disclosed values above $2 billion, as opposed to nine such deals in 2015.

As for the Software horizontal, deal activity was consistent over the past year and increased eleven percent relative to 2014. Eight of the top ten highest value transactions in 2016 were completed by strategic acquirers. The only Infrastructure deal in the horizontal’s top ten list of largest transactions was Symantec’s acquisition of Blue Coat in the cyber-security sector for $4.72 billion. Symantec also completed another high profile security deal with the announced acquisition of LifeLock, a provider of identity theft protection products and services for consumers, for $2.36 billion, which just missed inclusion in the top ten list.

The Online & Mobile horizontal market saw a slight uptick in volume on a yearly basis. Notable deals in 2016 associated with the Internet of Things (IoT) included Verizon’s acquisition of Fleetmatics, which offers cloud-based fleet and mobile workforce management solutions, for $2.4 billion, as Verizon continues to expand its reach into web-connected vehicles; and Sensity Systems, an IoT platform that embeds network technology in LED streetlights to create a smart lighting solution for facilities and municipalities; and Cisco Systems’ acquisition of Jasper Technologies, a cloud-based IoT service platform that helps enterprises launch and manage IoT services, for $1.4 billion.

Meanwhile, one notable trend in 2016 was the strong demand for machine learning companies throughout a variety of sectors. Transactions with a machine learning component completed by high profile acquirers during the year included Intel’s announced acquisition of Nervana Systems, which provides a software and hardware stack for deep learning, with a reported purchase price of more than $350 million; Apple’s acquisition of Turi, a machine learning platform used by data scientists and developers, for $200 million; Twitter’s acquisition of Magic Pony Technology, which develops machine learning and computer vision techniques for video compression performance, for a reported $150 million; Salesforce’s announced acquisitions of Twin Prime, which leverages machine learning techniques to prioritize performance issues with mobile apps; and PredictionIO, an open source machine learning server for software developers to create predictive features; and Google’s acquisition of Moodstocks, which develops machine learning based image recognition technology for smartphones.

In addition, there were several machine learning related deals during the year by acquirers in the transportation subsector. This included General Electric Company’s acquisitions of Bit Stew Systems, a platform for handling complex data integration, data analysis, and predictive automation, for $153 million; and, which helps businesses improve customer support through machine learning; Uber’s acquisition of Geometric Intelligence, an artificial intelligence (AI) research startup that will form the core of Uber’s new AI lab; and Ford Motor Company’s acquisition of SAIPS, a computer vision and machine learning startup that develops technologies for self-driving vehicles.

Another ongoing trend in 2016 involved consulting firms acquiring digital marketing companies. One notable acquirer along these lines was Accenture with the acquisition of London based Karmarama, which develops advertising campaigns to build immersive consumer experiences; and the acquisition of a majority stake in Japan based IMJ, a full-service digital marketing agency. Accenture has also been making acquisitions to diversify and expand its offerings with deals in other areas such as IT security and mobile strategy.

“In general strategic buyers maintain ample cash holdings and are looking to make investments to jump-start revenue growth in their core markets, as well as concentric markets where they can up-sell and cross-sell to the same or similar customer base,” said James Berkery, Managing Partner at Berkery Noyes. “Private equity also has large amounts of capital and leverage levels available and is looking to acquire or back unique opportunities with high growth rate and large market opportunity.”

A copy of the INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2016 is available at the Berkery Noyes website.