Berkery Noyes, the leading independent investment bank specializing in the information content and technology industries, today released its Half Year Mergers and Acquisitions Trends Report for the Software Industry.
The report analyzes merger and acquisition activity in the Software Industry in the first half of 2011 and compares it with activity in the four previous sixth-month periods from 2009-2010.
Berkery Noyes data show that total transaction volume increased one percent over the previous six-month period, from 651 transactions in second-half 2010 to 655 in first-half 2011. Total transaction value, however, decreased by three percent, from $41.3 billion to $40.1 billion.
Among the period’s key trends, median transaction values, revenue multiples, and EBIDTA multiples all made noticeable gains over second-half 2010. Median revenue multiples rose 22 percent, from 1.8 to 2.1, and median EBITDA multiples rose 13 percent, from 12.2 to 13.8, marking the fourth consecutive increase in median EBITDA multiples. Median transaction value has similarly experienced four consecutive increases.
“The Software space clearly recovered from what was a slow first quarter,” said Chris Young, managing director, Berkery Noyes. “Eight of the period’s top ten transactions were actually announced in the last three months.”
Four of the second quarter’s largest Software transactions were valued at over a billion dollars: Skype’s announced purchase by Microsoft for $9.1 billion, Schneider Electric SA’s purchase of Telvent, which creates software solutions for energy companies, for $1.9 billion, Infor’s purchase of Lawson Software for $1.8 billion, and Ericsson’s purchase of Telcordia Technologies, Inc. for $1.2 billion.
Google, the most acquisitive company in the Software Industry in 2010, remained similarly minded this period, leading all companies with nine transactions across the first half of 2011, which included purchases of digital video technology, mobile applications, and messaging software.
Consumer software continued to increase in deal volume this period. From first-half 2009, just two years ago, the consumer software segment has grown 156 percent, from 37 to 95 transactions.
Unique among investment banking firms, Berkery Noyes combines independent strategic research and industry intelligence with senior information technology banking expertise. Long having been an innovator in database and research technology in M&A, Berkery Noyes has committed itself to providing more expansive and more current information on the acquisition activity in their respective sectors.
A copy of the First Half 2011 Software Industry M&A Report is available at the Berkery Noyes website.