Q1 2020 Information Industry Trends

Transaction volume remained about constant over the past three months, from 1,046 to 1,052. Overall value fell 38 percent, from $120.7 billion to $74.5 billion. Volume declined 12 percent while value gained 23 percent when examined on a year-over-year basis. M&A activity throughout the last five quarters reached its peak in Q1 2019 whereas value reached its zenith in Q3 2019.

Five of the Information Industry’s top three largest deals in Q1 2020 were completed by financial sponsors. These five deals, with a combined value of $11.2 billion, accounted for 15 percent of the industry’s aggregate value year-to-date.

The median revenue multiple during the past quarter shifted from 2.9x to 2.7x, while the median EBITDA multiple moved upward from 12.0x to 12.5x. Disclosed median enterprise value multiples throughout the last five quarters were 2.6x revenue and 12.4x EBITDA.

Volume in each of the Information Industry’s three broad-based horizontal markets stayed nearly the same on a quarterly basis. In terms of the Online & Mobile horizontal, the number of deals in the mobile application subsector increased five percent.

Regarding the Software horizontal, deal activity in the Infrastructure segment underwent a 14 percent gain. The segment’s highest value transaction in Q1 2020 was Insight Venture Partners’ acquisition of Veeam Software, a cloud-focused backup and disaster recovery services provider, for $5 billion.

As for the Media & Marketing horizontal, deal flow in the Marketing segment also rose 14 percent. The segment’s largest transaction in Q1 2020 was private equity firm Clayton Dubilier & Rice’s announced acquisition of Huntsworth PLC, a healthcare communications and public relations company, for $665 million.