NEW YORK — July 7, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2016 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2016 and compares it with the four previous six-month periods from 2014 to 2015.

Transaction volume increased nine percent on a half year basis. The number of deals in the mobile application subsector rose 18 percent, from 188 to 221. Aggregate industry value gained 12 percent, from $85.88 billion to $96.14 billion. The median revenue multiple saw an uptick from 2.1x to 2.3x, while the median EBITDA multiple remained nearly constant during this timeframe at 11.7x. The peak for volume over the last 30 months occurred in first half 2015 whereas value reached its zenith in first half 2016.

M&A activity in the E-Content segment increased three percent compared to second half 2015. The overall industry’s largest transaction in first half 2016 was Microsoft’s announced acquisition of LinkedIn, a business social networking site, for $25.93 billion, which also occurred in the segment. This was the highest value deal ever completed by Microsoft, surpassing the acquisition of communications platform Skype for $9.18 billion in 2011.

The SaaS & Cloud segment experienced a ten percent increase in volume over the past six months. Regarding valuations, SaaS & Cloud acquisitions in first half 2016 received a median revenue multiple of 3.2x and median EBITDA multiple of 14.7x, as opposed to 2.4x revenue and 9.3x EBITDA in second half 2015, respectively.

As for the Communications segment, volume declined ten percent in first half 2016. However, deal flow in the segment remained about the same on a year-over-year basis. The largest Communications deal year-to-date was Cisco Systems’ acquisition of Jasper Technologies, an Internet of Things (IoT) service platform, for $1.4 billion. Meanwhile, IoT related deals in the automobile market year-to-date included General Motors’ announced acquisition of Cruise Automation, which develops technology for autonomous vehicles, for $1 billion; and Intel’s acquisition of Itseez, a software machine learning start-up that improves the navigation of self-driving cars.

Deal volume in the E-Marketing & Search segment rose eleven percent. The segment’s largest transaction year-to-date was Vista Equity Partners’ announced acquisition of Marketo, an automated marketing software company, for $1.62 billion. This was the segment’s only deal in the top ten list of highest value acquisitions thus far in 2016.

Upon examination of specific subsectors, notable E-Marketing & Search deals in the healthcare sector during the half year period included AccentHealth’s acquisition of PageScience, a provider of programmatic advertising technology that is used by pharmaceutical marketers; IMS Health’s acquisition of AlphaImpactRx, which offers research and analytics based insight for biopharmaceutical and consumer health companies; and Omnicom Health Group’s acquisition of BioPharm Communications, which specializes in the development of multichannel marketing programs to physicians and healthcare practitioners for pharmaceutical and biotechnology clients. Despite certain privacy and regulatory concerns, pharmaceutical brands are beginning to more closely look at programmatic and other advertising technologies as the sector’s digital landscape continues to evolve.

M&A volume in the E-Commerce segment, after staying about constant in second half 2015, improved 16 percent in first half 2016. In addition, E-Commerce overtook E-Marketing & Search as the industry’s second most active sector. The largest E-Commerce transaction year-to-date was Salesforce’s announced acquisition of Demandware, a provider of digital commerce solutions used by retailers, for $2.66 billion. Other notable segment deals during the period included Alibaba’s announced acquisition of Lazada, an online retailer with a strong presence in the Southeast Asian consumer market, for $1 billion; and Hudson’s Bay Company’s acquisition of Gilt Groupe, an online retailer that offers luxury flash sales, for $250 million.

“The buyer universe for advertising automation providers has expanded due to increased competitive dynamics from firms along the information solution curve,” said Vineet Asthana, Managing Director at Berkery Noyes. “Machine learning and predictive analytics are transforming the way marketers evaluate and respond to consumer activity, as cross channel digital marketing rapidly takes hold.” Asthana continued, “The amount of data points that a typical marketer has to interpret every day has skyrocketed. Machine learning has the ability to extract patterns from huge volumes of data which have high velocity and variety. Predictive analytics is also promising for improving B2B and B2C sales processes, especially lead and opportunity conversion levels.”

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2016 is available at the Berkery Noyes website.