Q1 2019 Information Industry Trends

Transaction volume gained three percent over the past three months, from 1,084 to 1,121. After rising 33 percent in Q4 2018, overall value fell 49 percent, from $118.2 billion to $60.1 billion. Volume improved 12 percent while value remained about constant when examined on a year-over-year basis. In addition, M&A activity throughout the past five quarters reached its peak in Q3 2018 whereas value reached its zenith in Q4 2018.

Two of the Information Industry’s top three largest deals in Q1 2019 were completed by financial sponsors. These two deals, with a combined value of $14.1 billion, represented almost one-quarter of the industry’s aggregate value year-to-date.

The median revenue multiple during the past quarter stayed the same at 2.8x, while the median EBITDA multiple declined from 13.0x to 10.5x. Disclosed median enterprise value multiples throughout the last five quarters were 2.5x revenue and 11.8x EBITDA.

Each of the Information Industry’s three broad-based horizontal markets experienced a slight uptick in volume on a quarterly basis. In terms of the Online & Mobile horizontal, the E-Content segment increased 25 percent, making it the sector with the largest Online & Mobile rise in volume.

Regarding the Software horizontal, deal activity in the Infrastructure segment underwent a 22 percent increase, which was the Software sector’s largest gain. The highest value security related transaction in Q1 2019 was Carbonite’s acquisition of Webroot, which secures endpoints and provides network protection, security awareness training, and threat intelligence services, for $619 million.

As for the Media & Marketing horizontal, deal flow in the Internet Media segment rose 13 percent, which was the most improved Media & Marketing sector in Q1 2019.