NEW YORK — October 3, 2012 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2012 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity in the Online and Mobile Industry across the three-month period and compares it with data for the six previous quarters.
Total volume in the report decreased 12 percent, from 516 to 454 transactions. At the same time, transaction value fell 33 percent, from $22.4 billion to $15.0 billion. However, the median revenue multiple increased from 1.5x to 1.9x and the median EBITDA multiple rose from 7.5x to 9.4x.
E-Content transaction volume increased 13 percent, making it the segment with the largest quarterly rise. M&A in the E-Commerce segment, after increasing 37 percent from first to second quarter 2012, declined 36 percent in third quarter 2012. This was partially influenced by a slow-down in daily deal transactions, a subsector that decreased 62 percent.
Meanwhile, transactions in the report involving consumer mobile apps showed a robust level of activity, rising 42 percent on a quarterly basis. Social discovery apps in particular have helped drive demand during the last two quarters, including Facebook’s acquisition of Glancee and Groupon’s acquisition of Ditto.me in second quarter 2012.
“The consumer industry is finding value in location based technologies and social discovery apps,” said Evan Klein, Managing Director at Berkery Noyes. “One interesting aspect is that companies can geocode and layer comparative shopping prices onto mobile devices in order for users to find the ‘best’ deals. These social networking applications, which allow for hyper-targeted local advertising, are capable of announcing deals or specials only to those within a certain radius of the business’ physical location.”
Moreover, the term “social graph,” which is used to depict people’s relationships and connections, has become a key aspect of the Online and Mobile Industry. Notable transactions with a social graphing element in third quarter 2012 included Facebook’s acquisition of Swaylo in the E-Marketing & Search segment, Jobscience’s acquisition of Atomkeep in the SaaS/ASP segment, and Betawork’s acquisition of Digg in the E-Content segment. This continued a trend of social graphing transactions from earlier in the year, such as Klout’s acquisition of Blockboard and Twitter’s acquisitions of RestEngine and Summify.
In addition, activity in the social media marketing subsector improved 50 percent compared to a year ago but stayed flat in third quarter 2012, contributing to the E-Marketing & Search segment’s 20 percent drop-off in the last three months. Nevertheless, there were several notable social media marketing deals in the quarter, for example Oracle’s announced acquisition of Involver for an undisclosed sum and Gannett’s acquisition of BLiNQ Media for $40 million. The largest social media marketing transaction in third quarter 2012, as well as the third largest related deal year-to-date, was Google’s acquisition of Wildfire Interactive for $250 million.
A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR THIRD QUARTER 2012 is available at the Berkery Noyes website.