NEW YORK — October 19, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2017 mergers and acquisitions trend report for Private Equity in the Information Industry.
The report analyzes M&A activity during the three-month period and compares it with data for the six previous quarters. It features transactions by financially sponsored acquirers within the Information Industry, including purchases made by subsidiaries or platforms of private equity firms.
Berkery Noyes’ research showed that private equity volume in the Information Industry year-to-date increased 20 percent compared to the corresponding timeframe in 2016, from 507 to 610 deals. Financially sponsored deal value year-over-year rose 15 percent, from $51.7 billion to $59.6 billion. In terms of valuations, the median revenue multiple shifted from 2.3x to 2.4x whereas the median EBITDA multiple moved slightly from 11.1x to 11.9x.
Private equity firms represented slightly less than one-quarter of volume but almost one-half of value throughout the first three quarters of 2017. Four of the industry’s top ten highest value deals year-to-date occurred in the third quarter, two of which occurred in the Software horizontal: Partners Group Holding’s announced acquisition of Civica, which offers specialized software systems and business process services to the public sector and commercial organizations, for $1.4 billion; and Centerbridge Capital Partners’ announced acquisition of Syncsort, which provides enterprise software for companies to collect, integrate, sort and distribute data, for $1.3 billion.
Regarding specific markets in the Information Industry, the most active acquirer in the Healthcare vertical through the first three quarters of 2017, either directly or through an affiliated business, was Arsenal Capital Partners with six transactions. Three of these deals occurred in the third quarter: Patient Genesis’ ConsentNow eConsent technology; FDAnews, which provides global regulatory information for executives in the clinical research, biopharmaceutical, and medical device sectors; and MedApproved, a SaaS-based, new product approval workflow solution used by hospitals.
KKR was also active in the Healthcare vertical during the quarter with the acquisitions of WebMD Corporation, an online health information provider, for $2.8 billion; and DentalPlans.com, a dental and health savings online marketplace, both of which occurred through KKR’s Internet brands. In addition, KKR-backed PRA Health Sciences completed several deals with the acquisitions of Symphony Health Solutions, which offers data, analytics, and technology solutions for biopharmaceutical manufacturers, healthcare providers, and payers, for $530 million; and Parallel 6, a SaaS platform designed to recruit, enroll, engage and manage patients in clinical trials, for $40 million.
In terms of the Education vertical, the most active acquirer through the first three quarters of 2017, either directly or through an affiliated business, was Leeds Equity Partners with four transactions. Three of these deals occurred in the third quarter: the CRM and Application Management product lines from Hobsons; Courseval, a provider of online course evaluation software used by higher education institutions to assess faculty and course performance; and iLawVentures, which offers J.D., post-J.D. and international programs for law schools in the U.S.
Upon examination of the Finance vertical, notable acquisitions in third quarter 2017 included Genstar Capital’s announced acquisition of Institutional Shareholder Services, which offers corporate governance and responsible investment solutions to financial market participants, for $720 million; and The Carlyle Group’s announced acquisition of Prima Solutions, a software vendor that designs, develops and markets software exclusively for insurance providers.
“Strategic buyers backed by financial sponsors are actively seeking transactions that will satisfy their PE owners’ investment objectives,” said James Berkery, Managing Partner at Berkery Noyes. “Many of these buyers are securing attractive financing packages, which could give their PE backers extra flexibility to make add-on investments with more equity.” Berkery continued, “PE firms that have long been active in the information marketplace are continuing to seek quality niche businesses that fit with their existing portfolios and, at the same time, are actively seeking to cash out certain investments.”
A copy of the PRIVATE EQUITY IN THE INFORMATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2017 is available at the Berkery Noyes website.