NEW YORK — January 16, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2017 mergers and acquisitions trend report for the Information Industry.

The Information report features companies in the Media & Marketing, Software, and Online & Mobile Industries. It analyzes M&A activity during 2017 and compares it with data covering 2015 and 2016.

According to Berkery Noyes’ latest research, deal volume year-over-year increased three percent. Total value declined 29 percent, from $434.22 billion to $309.42 billion.

The industry’s median revenue multiple from 2016 to 2017 stayed almost constant at 2.0x, while the median EBITDA also remained nearly the same at 11.0x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 1.9x revenue, compared to 3.5x  revenue for those in the $160 million and above range.

Regarding the three horizontal markets in the report, volume in the Media & Marketing portion of the Information Industry experienced a slight uptick throughout the past twelve months. The horizontal’s largest transaction during 2017 was The Walt Disney Company’s announced acquisition of 21st Century Fox, which includes the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for $66.1 billion. In terms of specific sectors, M&A activity in the Consumer Publishing segment increased 13 percent and deal flow within the B2B Publishing and Information segment improved four percent on a yearly basis.

As for the Software horizontal, volume increased four percent relative to 2016. The Infrastructure segment accounted for the horizontal’s largest rise in volume during the year with a 17 percent increase. Notable 2017 transactions in the security subsector included Thoma Bravo’s acquisition of Barracuda Networks, a provider of cloud-enabled security and data protection solutions, for $1.38 billion; Elliot Management’s announced acquisition of Gigamon, which offers traffic visibility network solutions for enterprises, data centers, and service providers, for $1.19 billion; DigiCert’s announced acquisition of Symantec’s website security and related public key infrastructure (PKI) solutions for $950 million; and CA Technologies’ acquisition of Veracode, a provider of cloud-based application intelligence and security verification services, for $614 million.

The Online & Mobile horizontal market saw volume decline two percent on a yearly basis. Notable acquirers of artificial intelligence (AI) related companies in the horizontal included Google with the acquisition of Senosis Health, a mobile health monitoring startup; and AIMatter, which specializes in AI technology for photo editing purposes; and Facebook with the acquisition of Ozlo, an AI startup that will be folded into Facebook’s Messenger app. As for high profile, non-traditional Online & Mobile acquirers in 2017, retailer Target announced its acquisitions of Shipt, an online grocery marketplace and same-day delivery platform, for $550 million; and Grand Junction, a technology transportation company whose software helps retailers and distributors manage local delivery throughout North America.

Meanwhile, one notable trend in 2017 throughout the Information Industry was the strong demand for blockchain related companies in a variety of sectors. Transactions with a blockchain component completed by high profile acquirers during the year included digital asset exchange Kraken’s acquisitions of Cryptograph, a charting and trading platform; digital music streaming service Spotify’s acquisition of Mediachain Labs, a blockchain startup that allows registering, identifying, and tracking of properly licensed use of digital creative works online; and CoinDesk’s acquisition of Lawnmower, a blockchain data and research platform.

“Although the skyrocketing prices of certain cryptocurrencies have been drawing the attention of retail and institutional investors, the primary focus should reside on the corresponding technology and infrastructure,” said Peter Ognibene, Managing Director at Berkery Noyes. “Possible uses of blockchain include smart contracts, identity management, copyright protection and licensing of intellectual property, payments, and many others. Blockchain offers substantial promise to revolutionize countless industries and companies in this space should continue to garner strong interest from both strategic and financial acquirers.”

A copy of the INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2017 is available at the Berkery Noyes website.