NEW YORK — July 12, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2017 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2017 and compares it with the four previous six-month periods from 2015 to 2016.
Transaction volume increased five percent on a half year basis. Of note, private equity deal activity rose 21 percent. Aggregate industry value fell 37 percent, from $83.25 billion to $52.62 billion. There were five transactions in first half 2017 with disclosed vales above the $1 billion threshold, compared to 16 such deals in second half 2016. The peak for volume and value over the last 30 months occurred in first half 2016.
The number of transactions in the mobile application subsector decreased two percent during the half year period, with a total of 198 acquisitions in first half 2017. As for specific vertical markets, notable mobile-based deals year-to date in the Healthcare industry included ABRY Partners’ announced acquisition of MobileHelp, a provider of mobile medical alert and personal health management solutions, for $130 million; and athenahealth’s announced acquisition of Praxify Technologies, which offers streamlined workflows, intuitive mobile interfaces and real-time analytical feedback for the EHR sector, for $63 million. In terms of the Finance industry, high profile acquirers included Fiserv with the announced acquisition of Monitise, a technology and services company that delivers mobile banking, payments, and commerce networks, for $86 million (or $52 million if net of cash acquired).
Meanwhile, acquirers continued to show interest in mobile solutions for the transportation sector in first half 2017, as shown by Uber rival Gett’s acquisition of Juno USA, a ridesharing application, for $200 million (note that Gett received a $300 million investment from Volkswagen in 2016); and car manufacturer Audi Group’s announced acquisition of Silvercar, a mobility technology car rental company with a particular focus on corporate vehicles services and airport car rentals.
The SaaS & Cloud segment experienced a four percent increase in volume over the past six months. Regarding valuations, SaaS & Cloud acquisitions in first half 2017 received a median revenue multiple of 2.4x, as opposed to 1.8x revenue for the aggregate industry.
As for the Communications segment, volume improved 15 percent in first half 2017, making it the sector with the largest gain in deal activity. High profile segment transactions year-to-date included Atlassian’s acquisition of Trello, a web-based collaboration software and project management service, for $425 million; and BICS’ announced acquisition of TeleSign, a communications platform as a service (CPaaS) company focused on authentication and mobile identity services to Internet and digital service providers, for $230 million.
Deal volume in the E-Marketing & Search segment decreased three percent on a half year basis. Notable segment transactions thus far in 2017 included Oracle’s acquisition of Moat, an ad measurement company, for a reported $850 million; Amobee’s acquisition of Turn, an advertising technology company used by marketers and agencies, for $310 million; and Vector Capital’s acquisition of Experian’s Cross-Channel Marketing business for $300 million. Upon examination of notable acquirers in the space, Vista Equity Partners was active with the acquisitions of Lithium Technologies, a cloud-based social media management company; ToutApp, a sales engagement platform, which was acquired through Marketo; and Market Track, which offers advertising, e-commerce, brand protection, and promotional intelligence solutions.
“Programmatic buying, native advertising, and retargeting presents an opportunity for the traditional media players to reach their audiences on a variety of platforms,” said Vineet Asthana, Managing Director at Berkery Noyes. “The ad tech space is getting crowded and should be ripe for consolidation moving forward. Acquirers in the middle market seem to be especially keen on picking up digital companies that have either a regional focus or differentiated technological offerings.”
M&A activity in the E-Commerce increased 12 percent in first half 2017. Notable segment transactions year-to-date included PetSmart’s acquisition of Chewy, an online retailer for pet products, for $3.35 billion; Amazon’s announced acquisition of Souq, a Dubai-based online retailer, for a reported $650 million; CVC Capital Partners’ announced acquisition of Etraveli, a global e-commerce platform for flight tickets, for $569 million; Harland Clarke Holding’s acquisition of RetailMeNot, an online coupon site specializing in promotional codes, for $455 million; Walmart’s announced acquisition of Bonobos, an online men’s retailer, for $310 million; and Eventbrite’s announced acquisition of Ticketfly, a ticketing platform focused on music promoters and venues, for $200 million.
A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2017 is available at the Berkery Noyes website.