Q1 2023 Information Industry Trends

Transaction volume saw a slight decline on a quarterly basis, from 938 to 928. Overall value gained 8.1 percent, from $48.4 billion to $52.3 billion.

Six of the Information Industry’s Top Ten Notable Transactions in Q1 2023 were completed by financial sponsors. These six transactions, with a combined value of $23.1 billion, accounted for 44.2 percent of the industry’s aggregate value year-to-date.

The median revenue multiple decreased from 2.9x last quarter, to 2.2x in Q1 2023, while the median EBITDA multiple also fell from 10.6x to 9.3x. Disclosed median enterprise value multiples throughout the last five quarters were 2.8x revenue and 10.9x EBITDA.

Regarding the Information Industry’s three broad-based markets, M&A activity in the Software horizontal saw a two percent uptick over the past three months. Transaction volume in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, decreased by nine percent from Q4 2022 to Q1 2023. The number of deals in the Niche Software and Consumer Software segments saw increases of 5.6 percent and 11.1 percent respectively, while transaction volume in the Infrastructure Software segment remained nearly constant.

As for the Online & Mobile horizontal, deal activity saw a nominal uptick from Q4 2022 to Q1 2023, with volume in the E-Commerce segment rising 14.7 percent. Deal flow in the SaaS & Cloud segment witnessed a 6.8 percent increase in transaction volume. Meanwhile, M&A activity in the Communications segment experienced a 4.3 percent increase.

In terms of the Media & Marketing horizontal, volume decreased 4.4 percent on a quarterly basis. M&A activity in the Entertainment segment experienced a significant decline of 36.4 percent from Q4 2022 to Q1 2023.