NEW YORK — April 1, 2015 — Berkery Noyes, an independent mid-market investment bank, today released its Q1 2015 mergers and acquisitions trend report for the Software Industry. The report analyzes M&A activity in the Software Industry during Q1 2015 and compares it with the past four quarters.

Transaction volume experienced a slight uptick on a quarter-to-quarter basis, with a total of 464 deals. Overall value rose 21 percent, from $18.7 billion to $22.6 billion. The number of deals throughout the past five quarters reached its peak in Q2 2014, whereas aggregate value reached its zenith in Q1 2014. When compared to the same time period in 2014, volume in Q1 2015 increased eight percent.

The industry’s largest private equity backed deal year-to-date was Bain Capital’s acquisition of enterprise security company Blue Coat Systems for $2.4 billion. This was the only Infrastructure Software deal in the list of top ten largest transactions in Q1 2015. An investor group led by Thoma Bravo previously took Blue Coat private in 2011 for $1.1 billion.

Deal volume in the “Niche Software” segment, which is targeted to specific vertical markets, increased 12 percent in Q1 2015. Of note, five of the overall industry’s top ten highest value deals occurred in the Niche segment. Four of these five transactions were located in the Finance vertical. The segment’s largest deal during the quarter was SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management and accounting systems software, for $2.7 billion. In addition, Temenos Group’s $260 million acquisition of Multifonds, a fund administration software company, just missed inclusion in the top ten list.

As for other sectors covered in the report, Consumer Software volume decreased 13 percent in Q1 2015, its second consecutive quarterly decline. This followed three quarters where the segment’s activity remained about constant. In terms of notable transactions, high profile acquirers have been pursuing mobile-based Consumer deals. For instance, Microsoft acquired Sunrise Atelier, the developer of a mobile calendar application. Microsoft also completed a related deal in Q4 2014 with the acquisition of mobile email application Acompli for $200 million. Meanwhile, cloud file sharing and storage service Dropbox acquired CloudOn, which allows users to create and edit documents on mobile devices, for $100 million. One new Consumer acquirer was Forbes Media with the acquisition of Camerama, a mobile photo sharing application.

The Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a five percent decline in transaction volume throughout the past three months. This followed a 14 percent rise in Q4 2014, its highest point over the last five quarters. The segment’s largest deal in Q1 2015 and the only one in the industry’s top ten list was Lexmark’s acquisition of Kofax, which provides image capture software and other solutions, for $955 million. Lexmark has completed several software focused acquisitions recently as the company looks to transition from its traditional focus on inkjet printing and strengthen its enterprise software business.

Deal volume in the Infrastructure Software segment decreased 11 percent in Q1 2015. Nonetheless, this marked a 31 percent gain relative to Q1 2014. Harman International, an audio and infotainment manufacturer that serves the automotive and other markets, completed a notable Infrastructure deal in Q1 2015 with the acquisition of Red Bend Software. Red Bend, a provider of software management technology for connected devices, was acquired for $170 million. Harman also completed another deal during the quarter with the acquisition of Symphony Teleca, a software engineering and integration service, for $548 million (excluding the potential earn-out). However, Symphony Teleca is primarily services based, hence its exclusion from this report.

In addition to the Blue Coat and Harman deals mentioned above, other transactions in the segment completed by notable acquirers in Q1 2015 included Citrix’s acquisition of Sanbolic, a storage virtualization company; HP’s acquisition of Voltage Security, a data security and encryption business; and VMware’s acquisition of Immidio, a software development company that provides workspace virtualization solutions.

“Ensuring that organizations have secured their data is garnering more attention due to phishing exploits, accidental dispensing of information and even internally based criminal activity,” said James Berkery, Chief Information Officer at Berkery Noyes. “While the business models and technologies associated with these issues continues to confound some organizations, the applications of advanced search, analytical capabilities and other solutions are bearing fruit.” Berkery continued, “Whether in response to particular situations or proactively in an attempt to determine where the next attack might come from, there are several verticals, for instance financial services and life sciences, which are investing more heavily in this space. Vendors here are also garnering the attention of major security platform providers as they continue to consolidate capabilities to add value.”

A copy of the SOFTWARE INDUSTRY M&A REPORT FOR FIRST QUARTER 2015 is available at the Berkery Noyes website.