NEW YORK — January 15, 2014 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2013 mergers and acquisitions trend report for the Information Industry.
The Information report features companies in the Media and Marketing, Software, and Online and Mobile Industries. It analyzes M&A activity during 2013 and compares it with data covering 2011 and 2012.
According to Berkery Noyes’ latest research, the industry’s median revenue multiple increased from 1.8x in 2012 to 2.1x in 2013, while the median EBITDA multiple moved slightly from 9.9x to 10.3x. There was a two percent uptick in deal volume, with a total of 3,613 transactions in 2013. Deal value in the Information Industry gained 17 percent on a year-to-year basis, from $157.25 billion to $184.63 billion. The announced merger of Publicis and Omnicom accounted for 11 percent of the industry’s aggregate transaction value in 2013.
Regarding the three horizontal markets in the report, volume in the Media and Marketing portion of the Information Industry remained nearly constant. Strategic acquirers remained dominant in the space, representing 91 percent of volume. Of note, the Broadcasting segment saw a decline in volume but a sizeable rise in value. Broadcasting deal value more than tripled, from $3.95 billion to $13.34 billion. This was due in part to several acquisitions by Sinclair Broadcast Group. The largest of Sinclair’s transactions in 2013 was the acquisition of eight television stations from Allbritton Communications Company for $985 million.
As for the Software horizontal, deal activity improved two percent throughout the past twelve months. In terms of the Business Software segment, which consists of software designed for general business practices and not specific niche sector needs, the most active acquirer over the three years covered in the report was Oracle with 14 transactions. Three of these deals occurred in 2013, the largest of which was Oracle’s acquisition of Responsys, a provider of marketing software, for $1.39 billion.
Meanwhile, the Online and Mobile horizontal market saw an eight percent increase in volume between 2012 and 2013. One notable related acquirer was GoDaddy.com, which itself was acquired by a private equity consortium back in 2011. GoDaddy’s acquisitions during the past year indicate that the domain provider is looking to expand beyond its core infrastructure and Web hosting business. Along these lines, GoDaddy acquired Locu, a local listing service, for $70 million; Ronin, an online invoicing company; and Mdot, a mobile application that assists small businesses with creating websites. GoDaddy has built its online bookkeeping service in large part through the acquisitions of Ronin and cloud-based financial management company Outright.com, the latter of which was acquired in 2012.
As for the mobile application subsector, transactions involving mobile consumer applications increased 31 percent, from 168 to 220. At the same time, deals pertaining to mobile business applications rose 20 percent, from 162 to 195. Apple was a notable related acquirer with several mobile-based transactions in 2013, most of which focused on various mapping technologies. This included the acquisitions of Hopstop, Locationary, and Embark.
“A rising tide of private equity capital, renewed appetite for acquisitions among strategic information companies, and favorable prospects for corporate profits and economic growth paint a compelling picture for M&A at the moment,” said James Berkery, Chief Information Officer at Berkery Noyes. “Many information companies are also finding ways to diversify their revenue streams, achieve scale, and better deploy their assets, all of which is helping to lay the foundation for another strong year of deal activity ahead.”
A copy of the INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2013 is available at the Berkery Noyes website.