NEW YORK — July 9, 2014 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2014 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity during the first half of 2014 and compares it with the four previous six-month periods from 2012 to 2013.

Transaction volume increased seven percent in first half 2014. Aggregate value rose 57 percent, from $40.82 billion to $63.97 billion. The median revenue multiple remained constant at 2.3x, while the median EBITDA multiple increased from 9.5x to 12.5x.

Deal activity in the consumer mobile application subsector increased seven percent, from 112 to 120 transactions. Two of the three largest deals in the Communications segment in first half 2014 were located in the consumer mobile application subsector. This consisted of Facebook’s acquisition of WhatsApp for $16 billion and Rakuten’s acquisition of Viber for $900 million. Other recent mobile-based messaging deals included Yahoo!’s acquisition of Blink, one of Snapchat’s rivals (note that Snapchat rejected a $3 billion offer from Facebook in 2013), Voxox’s acquisition of PokeTalk, and Path’s acquisition of TalkTo.

The most active segment year-to-date was E-Marketing & Search with 336 transactions, which represented a 17 percent increase over the past six months. This was the first time that E-Marketing & Search volume surpassed the SaaS & Cloud segment on a half year basis during the past two and a half years covered in the report. However, SaaS & Cloud deals during this timeframe received a median revenue multiple of 2.9x and a median EBITDA multiple of 15.6x, compared to 1.2x and 11.8x for E-Marketing & Search deals, respectively.

One notable acquirer in the E-Marketing & Search segment was private equity firm GTCR, which acquired Vocus for $352 million and Cision for $164 million. GTCR will combine Vocus and Cision to create a global public relations cloud-based company. In terms of high profile strategic acquirers, IBM made a move in the segment with its acquisition of Silverpop Systems, a digital marketing software company focused on marketing automation. The enterprise marketing automation subsector has been active throughout the past few years, as indicated by Oracle, Salesforce, Adobe, and others that have completed acquisitions in the space.

Given that the media buying process is rapidly changing, some companies are also pursuing acquisitions to bolster their programmatic advertising platforms. For instance, AOL acquired Convertro, a company that allows marketers to maximize their advertising spend across different media channels, for $91 million. Google completed a similar transaction with the acquisition of Adometry, a marketing attribution firm. AOL has been making deals in the programmatic video buying space as well, most recently with the acquisition of PrecisionDemand, a tv ad-targeting company. PrecisionDemand was merged with, the latter of which AOL acquired for $405 million in second half 2013.

The number of deals in the E-Commerce segment improved nine percent in first half 2014. There were two notable instances of travel companies making acquisitions focused on the restaurant marketplace. Along these lines, the largest transaction in the E-Commerce segment was Priceline’s acquisition of online restaurant management system OpenTable for $2.4 billion. A similar deal in the half year period was TripAdvisor’s acquisition LaFourchette, a European-based online restaurant booking platform, for a reported $140 million.

As for notable trends relevant to E-Commerce, acquirers have also been showing an interest in omni-channel retail solutions. This is becoming more crucial as analytics, social media, and other tools to better understand the purchasing habits of consumers gain in popularity. Recent deals in the space included ShopperTrak’s acquisition of RapidBlue Solutions and SAP’s acquisition of SeeWhy.

“E-commerce can be altered by tailoring products to specific audiences and marketers can use social graphing to optimize online advertising,” said Evan Klein, Managing Director at Berkery Noyes. “Given the emphasis being placed on big data and leveraging large datasets, interpreting habits and preferences based on social connections is another important tool that can be used to help predict consumer behavior.”

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR HALF YEAR 2014 is available at the Berkery Noyes website.