New York – NEW YORK — Berkery Noyes, a leading middle market investment bank, has released its 2010 Half Year Software M&A Trends Report. This report analyzes merger and acquisition activity in the Software Industry in the first half of 2010 and compares it with activity in the four previous sixth month periods from 2008-2009.
EBITDA multiples in the Software industry experienced a 30% half-to-half increase from 11.3 in 2nd Half 2009 to 14.7 in 1st Half 2010. This is a 42% increase from the low of 8.5 in 1st Half 2009.
The sector saw a 24% increase in volume, exceeding the total volume of each of the four preceding sixth month periods. Consumer Applications saw a 94%jump in volume from 2nd Half 2009, indicating a market eager to attract end users with innovation.
The proliferation of smartphones, and in particular those with application oriented operating systems, have helped to drive mobile application software to rise 79% from the past half year, from 31 to 59. This is a sharp rise as opposed to the modest growth of 27% from 1st half of 2009 to the 2nd half and of 24% from 2nd half 2008 to 1st half 2009.
Of the top ten deals, four companies being acquired have been in business since 1995. The sale of Cybersource Corporation, Sybase Inc., Palm Inc., and the exit of Verisign, Inc. from its main authentication business, marks the consolidation of once-prominent software industry brands.
Online Transactions within the Software Industry increased, rising to 43% of the total software market in 1st Half 2010. The rise was driven mostly by the strength of Cloud Computing, SaaS, Mobile, and Internet Enabling Applications.
Google, Inc. was the most active buyer within the Software Industry, with nine transactions, acquiring technologies from social network search engines to online document editing.