NEW YORK — April 14, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its Q1 2016 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 Q1 2016 and compares it with the past four quarters.

According to Berkery Noyes’ latest data, transaction volume in the Information Industry increased three percent over the past three months. Deal value fell 58 percent, from $152.6 billion to $63.5 billion. The median revenue multiple declined from 2.4x to 2.1x, while the median EBITDA multiple moved downward from 16.3x to 12.5x.

Of note, five of the Information Industry’s top ten largest acquisitions last year occurred during Q4 2015. These five transactions had a combined value of $93.6 billion. If excluded, value gained eight percent from Q4 2015 to Q1 2016. Aggregate value also rose 31 percent on a year-over-year basis. Volume throughout the past five quarters reached its peak in Q2 2015, whereas value reached its zenith in Q4 2015.

There was an eight percent quarterly decrease in private equity information volume, from 156 to 144. This marked a return to its Q3 2015 level. In terms of value, none of the overall Information Industry’s top ten largest deals were backed by financial sponsors.

The Online & Mobile portion of the Information Industry saw a 12 percent quarterly gain in volume. The number of deals in the horizontal’s mobile application subsector rose 35 percent, from 88 to 115 acquisitions. Meanwhile, there was a 20 percent volume increase in the SaaS & Cloud segment.

Transaction volume in the Media & Marketing horizontal declined six percent in Q1 2016. However, the Marketing segment underwent a 15 percent improvement during the quarter. Six of the Information Industry’s top ten highest value acquisitions year-to-date were in the Media and Marketing horizontal.

M&A activity in the horizontal’s Entertainment Content segment increased 16 percent on a quarterly basis. Notable segment transactions thus far in 2016 included Dalian Wanda Group’s acquisition of Legendary Entertainment, a media company with film, television, and digital divisions, for $3.5 billion; Kakao’s acquisition of Loen Entertainment, an online music service provider, for $1.4 billion; and Shandong’s acquisition of Jagex, the largest independent games developer and publisher in the U.K., for $300 million. Also of note, Kakao’s acquisition of Loen Entertainment was one of the largest tech-based transactions in South Korea’s history. Kakao is a mobile messaging application that was merged with Daum, an Internet media company and web portal, in 2014.

Regarding the Software horizontal market, volume increased seven percent during the past quarter. Two of the Software horizontal’s top ten highest value deals in Q1 2016 were completed by private equity firms. Both transactions occurred in the Niche Software segment, which is targeted to specific vertical markets. This consisted of GI Partners’ announced acquisition of Netsmart Technologies, a provider of electronic health records, patient management, billing and other solutions for the health and human services sector, which is being acquired in a joint venture with Allscripts, for $950 million; and GTCR’s announced acquisition of Lytx, a video telematics company that provides driver safety and compliance solutions, for $500 million.

As for activity in the Niche segment, deal volume gained six percent in Q1 2016. There were several high profile acquirers that made acquisitions focused on the restaurant marketplace. This included NCR Corporation’s acquisition of Cimplebox, which provides SaaS back-office management software to restaurant operators and retailers; and Heartland Payments’ acquisition of Beanstalk Data, a SaaS customer engagement platform for restaurants. Heartland also completed several related deals in 2015 with the acquisitions of Digital Dining, pcAmerica, and Dinerware.

Upon examination of specific information subsectors, one new high profile acquirer in the transportation space in Q1 2016 was automaker General Motors with the announced acquisition of Cruise Automation, a software company that develops technology for autonomous vehicles, for a reported $1 billion; and the technology and most assets of SideCar Technologies, a ride-sharing service. General Motors also recently invested $500 million in ride-haling company Lyft. This follows several notable related deals in 2015, such as Ola’s acquisition of taxi rental aggregator TaxiforSure for $200 million; and Uber’s acquisitions of deCarta, a mapping and local search platform; and Microsoft’s Bing mapping unit.

“The results in Q1 were attributable in part to several factors,” said James Berkery, Chief Information Officer at Berkery Noyes. “This includes the residual impact from high levels of activity over the past few quarters and from companies that are realigning their near-term goals with shifts in the marketplace. In general there have also been fewer megadeals, but middle market transaction volume should continue at a steady pace as acquirers look for innovative technologies to help expand their product offerings.”

A copy of the INFORMATION INDUSTRY M&A REPORT FOR FIRST QUARTER 2016 is available at the Berkery Noyes website.