NEW YORK — July 24, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2017 mergers and acquisitions trend report for Private Equity in the Information Industry.

The report analyzes M&A in the private equity market for the first half of 2017 and compares it with activity in the four previous six-month periods from 2015 to 2016. It features transactions completed by financially sponsored acquirers within the Information Industry, including purchases through subsidiaries or platforms of private equity firms. The Information Industry is defined here as being comprised of companies in either the Media & Marketing, Software, or Online & Mobile sectors.

Sponsored deal volume increased 24 percent on a half year basis. Total value fell from $43.94 billion to $42.19 billion, a four percent decline. The peak for private equity volume during the past two-and-a-half years occurred in first half 2017, whereas value reached its zenith in second half 2015.

Blackstone Group and Thoma Bravo combined were responsible for five of the Information Industry’s top ten highest value transactions year-to-date. Along these lines, Blackstone announced its acquisition of Aon’s technology-enabled and human resources platform for $4.3 billion; Blackstone joined forces with Canada Pension Plan Investment Board (CPPIB) to acquire Ascend Learning, which offers educational content and online tools for students, educational institutions and employers, with a particular focus on healthcare and other licensure-driven occupations, for $2 billion; Blackstone acquired SESAC, a music rights organization, for $1 billion; Thoma Bravo acquired Lexmark International’s enterprise software business, which is comprised of Kofax, ReadSoft and Perceptive, for $1.35 billion; and Thoma Bravo acquired Planview, which develops project management and workforce collaboration tools, for $800 million.

Meanwhile, Thoma Bravo completed several other transactions during the half year period with Continuum Managed Services, a platform for managed IT service providers; Riskonnect, which offers integrated risk management technology solutions; Data3Sixty, a cloud-based data governance provider; Resonant Software, a provider of Integrated Life Underwriting Solutions (ILUS); MVS Solutions, a mainframe batch automation technology company; and Idevio, a provider of geographical-related software and services.

Regarding the horizontal Software market, sponsored volume gained 25 percent in first half 2017. Notable Infrastructure Software deals completed by financial sponsors year-to-date included HGGC’s announced acquisition of IDERA, a provider of database lifecycle management solutions and application development tools, for $1.13 billion; Clearlake Capital’s acquisition of LANDesk Software, a provider of IT management software solutions, for a reported $1.1 billion, which will be combined with Clearlake’s portfolio company HEAT Software; Madison Dearborn Partners’ announced acquisition of BlueCat Networks, an enterprise DNS solutions provider, for $305 million; LLR Partners’ acquisition of BluVector, a machine learning threat detection and cyber-security company; and Blackstone’s acquisition of a majority stake in Cloudreach, which offers cloud computing and consulting services that support Amazon Web Services, Microsoft Azure, and Salesforce.

In terms of specific verticals, private equity volume in the Healthcare market rose four percent in first half 2017. This followed an 18 percent increase in second half 2016. The largest mobile-based Healthcare deal over the past six months was ABRY Partners’ announced acquisition of MobileHelp, a provider of mobile medical alert and personal health management solutions, for $130 million.

Sponsored deal activity in the industry’s Finance vertical increased 32 percent on a half year basis. High profile transactions in the Finance segment year-to-date included Vista Equity Partners’ announced acquisition of DH Corporation, a provider of technology solutions to financial institutions, for $3.49 billion, which Vista plans to combine with its portfolio company Misys (note that Misys and DH will operate under the new brand name Finastra); and GTCR’s acquisition of Sage Payment Solutions, a provider of payment processing and merchant acquiring solutions in North America, for $260 million.

As for the industry’s Education vertical, private equity deal flow decreased 15 percent, which was the same as its first half 2016 level. Notable Education deals in first half 2017 included CVC Capital Partners’ announced acquisition of QA, an IT education and skills business, for $886 million; Providence Equity Partners’ acquisition of NACE Schools, a Spain-based international schools group that serves more than 11,000 primary and secondary students, for $371 million; and PSI Services’ acquisition of Performance Assessment Network, which offers talent assessment and measurement solutions for the corporate, government and education marketplace, for $271 million (note that PSI Services is backed by Waud Capital).

“Some financial buyers are still waiting for the right opportunity to put their excess capital to work, which in certain instances has been sitting on the sidelines for quite some time,” said James Berkery, Managing Partner at Berkery Noyes. “Likewise, given that interest rates have remained relatively low, the lending environment for debt financed transactions continues to be favorable for borrowers.” Berkery continued, “Along with solid gains in the equity market and a heightened sense of confidence among many investors, the conditions for buyout activity over the near-term are encouraging.”

A copy of the PRIVATE EQUITY IN THE INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2017 is available at the Berkery Noyes website.