NEW YORK — January 26, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2016 mergers and acquisitions trend report for Private Equity in the Information Industry.

The report analyzes M&A activity in the private equity market during 2016 and compares it with data covering 2014 and 2015. It features transactions made by financially sponsored acquirers within the Information Industry, including purchases made by subsidiaries or platforms of private equity firms.

According to Berkery Noyes’ latest research, private equity volume in the Information Industry moved slightly upwards on a yearly basis, from 629 to 638 deals. Total sponsored value remained about constant as well, from $65.41 billion to $64.67 billion. Of note, each of the top five and eight of the top ten highest value deals in 2016 occurred during the second half of the year.

Regarding valuations, the median revenue multiple year-over-year moved declined from 2.3x to 2.0x, while the median EBITDA multiple fell from 13.2x to 10.9x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 1.2x revenue, compared to 1.6x revenue for those in the $20-$80 million range and 3.0x revenue for those in the $80-$160 million range and above.

The industry’s two largest sponsored transactions in 2016 each occurred in the Media horizontal’s Entertainment vertical. This consisted of a Chinese consortium’s announced acquisition of Playtika, a social and mobile games company based in Israel, for $4.4 billion; and IMG Worldwide’s acquisition of Ultimate Fighting Championship, a professional mixed martial arts organization, for $4 billion. Rounding out the industry’s top three largest deals, which also occurred in the Media horizontal, was the sale of Thomson Reuters’ Intellectual Property & Science Business in the B2B Publishing and Information segment to private equity funds Onex and Baring Asia for $3.55 billion.

The horizontal Software market saw a ten percent yearly rise in private equity deal activity. Meanwhile, Thoma Bravo was a high profile acquirer in the horizontal with several notable acquisitions during the past year, which included Qlik Technologies, a provider of business intelligence software and data visualization tools, for $2.58 billion; Trader Corporation, a digital automotive marketplace, for $1.22 billion; and Imprivata, an IT security company that provides authentication, access management and secure communication solutions to the healthcare sector, for $544 million.

The Finance vertical, after seeing sponsored volume rise 13 percent from 2014 to 2015, was almost constant during the past year. Notable Finance related deals in 2016 included Advent International backed Vantiv’s acquisition of Moneris Solutions, a provider of payment processing solutions, for $425 million; and GTCR’s acquisition of Optimal Blue, a cloud-based technology provider that offers enterprise lending services to mortgage originators and investors, for $350 million.

The Healthcare vertical experienced a 12 percent yearly decline in private equity volume. Six of the overall Healthcare vertical’s top ten highest value deals during the year were backed by financial sponsors. The largest private equity backed Healthcare IT deal in 2016 was GI Partners’ acquisition of Netsmart Technologies, a provider of electronic health records, patient management, billing and other solutions, which was acquired in a joint venture with Allscripts, for $950 million.

The Education vertical witnessed private equity volume stay nearly the same on an annual basis. This followed a 19 percent increase from 2014 to 2015. The largest Education transaction in 2016 and the only one with a disclosed value above $1 billion was Apollo Education Group’s announced acquisition by a consortium of investors for $1.1 billion. Regarding notable Higher-Ed transactions in the tuition and fee payment, Providence Equity Partners (through Blackboard) acquired Higher One Holdings for $260 million as well as Sequoia Retail Systems.

“Many private equity firms have significant amounts of capital available to acquire established, market-leading companies of scale,” said James Berkery, Managing Partner at Berkery Noyes. “The debt markets remain strong and liquid, enabling financial sponsors to compete with strategics on valuation, particularly for businesses with growth opportunities.” Berkery continued, “With solid gains in equities throughout the past year and a heightened sense of confidence among many investors, the near-term conditions for buyout activity are encouraging.”

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