NEW YORK — January 11, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2015 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity in the Online and Mobile Industry during 2015 and compares it with data covering 2013 and 2014.
According to Berkery Noyes’ research, transaction volume increased 12 percent on a year-to-year basis. Aggregate deal value gained 19 percent, from $131.16 billion to $156.49 billion. The median revenue multiple decreased from 2.4x to 2.2x, while the median EBITDA multiple declined from 13.1x to 10.0x. Deals in the $10-$20 million range over the past three years received a median enterprise value multiple of 2.1x revenue, whereas those above $160 million had a median enterprise value multiple of 3.6x revenue.
The number of transactions in the industry’s consumer mobile application subsector rose three percent over the past year. This represented a ten percent gain compared to 2013. One of the largest mobile-based deals in 2015 was Activision Blizzard’s acquisition of King Digital Entertainment, the creator of the well-known mobile game Candy Crush Saga, for $5.9 billion. Activision Blizzard completed a management led buyout from its most significant shareholder Vivendi in 2013 for $8.2 billion.
The SaaS & Cloud segment was responsible for the overall industry’s largest yearly rise in volume with a 21 percent increase. SaaS & Cloud acquisitions from 2013 through 2015 saw a median revenue multiple of 2.6x and median EBITDA multiple of 11.9x.
M&A volume in the E-Commerce segment increased 16 percent in 2015. Upon examination of value, the largest E-Commerce acquirer in 2015 was online travel company Expedia with a combined total of $4.94 billion paid in transaction value. This consisted of HomeAway, an online marketplace for the vacation rental industry, for $3.24 billion; as well as Orbitz Worldwide for $1.42 billion and Travelocity.com for $280 million. In addition, TripAdvisor acquired several online restaurant review and booking services with the acquisition of Dimmi in Australia; Iens in the Netherlands; Restopolis in Italy; and BestTables in Portugal.
Transaction activity in the E-Marketing & Search segment declined three percent throughout the last 12 months. This followed a 19 percent improvement from 2013 to 2014. Deal flow remained strong in the ad tech sector during 2015, as indicated by notable transactions such as Twitter’s acquisition of TellApart for $653 million; Nielsen’s acquisition of eXelate for $200 million; The Rubicon Project’s acquisition of Chango for $122 million; and AppNexus’ acquisition of Yieldex, for $100 million.
“Companies that can differentiate their offerings from the average digital and mobile-based ad tech players are performing well,” said Vineet Asthana, Managing Director at Berkery Noyes. “Potential acquirers include large telecommunications firms, traditional B2B media companies, and offline data providers that are looking for a digital platform. Furthermore many advertising networks without programmatic technology capabilities want to expand their suite of solutions to help better automate their marketing campaigns.”
As for other areas of the E-Marketing & Search segment, Endurance International Group announced its acquisition of email marketing company Constant Contact for $880 million; and Cision announced its acquisition of PR Newswire, a multi-channel content distribution network, for $841 million. Private equity firm GTCR previously acquired cloud-based public relations and marketing software companies Vocus for $352 million and Cision for $130 million in 2014.
Meanwhile, Accenture was a notable non-traditional acquirer in the E-Marketing & Search segment with several related transactions during the past year. The professional services company acquired Boomerang Pharmaceutical Communications, a digital marketing agency in Switzerland that serves the pharmaceutical, biotech, and medical device sectors; AD.Dialeto, a digital marketing company in Brazil; Chaotic Moon, a creative technology studio in the United States that focuses on experience strategy and digital design; PacificLink, a digital agency group in Hong Kong; Brightstep, a digital consulting company in Sweden; and Reactive Media, a website design, digital strategy, and web development agency in Australia. These companies will be integrated with Accenture Interactive, which is part of the firm’s Accenture Digital business.
The Communications segment underwent an 11 percent improvement in volume. Notable segment deals in 2015 included Siris Capital Group’s acquisition of Premiere Global Services, Inc. (PGi), a provider of collaboration software and services, for $979 million; Cisco Systems’ announced acquisition of Acano Limited, a conferencing software business, for $700 million; and Atos’ announced acquisition of Unify, an integrated communications company, for $427 million.
In terms of other notable industry trends, there were several deals completed by high profile acquirers in 2015 relating to the Internet of Things (IoT). This included Cisco Systems’ acquisition of ParStream, IBM’s acquisition of StrongLoop, Autodesk’s acquisition of SeeControl, and Amazon’s acquisition of 2lemetry.
A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR FULL YEAR 2015 is available at the Berkery Noyes website.