September 2, 2015 PRIVATE EQUITY VOLUME REACHES ITS HIGHEST LEVEL OVER THE PAST TWO-AND-A-HALF YEARS

Berkery Noyes’ Private Equity report for first half 2015 indicated that deal volume increased 12 percent on a half-to-half year basis. Total value rose from $23.49 billion to $24.99 billion, a six percent gain. The peak for private equity volume during the past two-and-a-half years occurred in first half 2015, whereas value reached its zenith in first half 2014. 

The Information Industry’s most active financial sponsor in first half 2015 was Vista Equity Partners with 12 transactions. Based on publicly disclosed values, the largest of these deals was Vista’s acquisition of Powerschool, a web-based K-12 student information system, for $350 million. Meanwhile, Marlin Equity Partners was another active private equity firm in the Software market with eight transactions year-to-date.

Marlin’s acquisitions consisted of Resolution1Security and Fidelis Cybersecurity Solutions in the cyber-security subsector; e-MDs and HomecareCRM in the Healthcare IT sector; International Business Systems in the enterprise resource planning and supply chain subsectors; Arcplan, a business intelligence and corporate performance management company; Asentinel, a telecom expense management firm; and barometerIT, a provider of IT portfolio analysis solutions.

In terms of specific verticals, private equity volume in the Education market rose 38 percent in first half 2015, from 37 to 51 deals. Providence Equity Partners and The Riverside Company were the industry’s most active Education acquirers with three transactions each in the space year-to-date, which includes those either purchased directly or through an affiliated business. 

Riverside acquired Health and Safety Institute, an emergency care and response training organization; C-Learning, an e-learning course developer; and Digital Ignite, a continuing education and social learning platform. Providence Equity acquired Remote-Learner UK, which provides hosting, support, consulting services to the education industry; Schoolwires, an educational website, hosting and content management provider to K-12 schools; and Endeavour College of Natural Health, a vocational training institution in the health and wellness sector. 

“Strong balance sheets, less restrictive lending, and more plentiful private sellers are fueling deal activity,” said James Berkery, Chief Information Officer at Berkery Noyes. “Valuations have also been robust over the past few years, especially as financial sponsors compete with strategic acquires for companies that have attractive components such as recurring revenue models, high margins, continuous growth, diversified customer concentration, and proprietary technology in markets with a barrier to entry.”