Transaction volume experienced a two percent uptick over the past three months, from 949 to 967. Deal value increased 44 percent, from $47.3 billion to $67.9 billion. The median revenue multiple remained constant at 2.2x, while the median EBITDA multiple increased from 9.6x to 11.0x.
The peak for value throughout the past five quarters occurred in Q3 2013. Nonetheless, value in Q1 2014 nearly quadrupled compared to Q1 2013. There were seven transactions with disclosed values that reached the $1 billion threshold in Q1 2014, compared to only two in Q1 2013.
Regarding the industry’s three broad-based horizontal markets, Online & Mobile saw a six percent increase in volume between Q4 2013 and Q1 2014. This included a 16 percent rise in the E-Marketing and Search segment, from 147 to 171 transactions.
In the Software horizontal, volume declined four percent. However, this represented a 14 percent increase compared to Q1 2013. The Niche Software segment, which is targeted to specific vertical markets, underwent a 10 percent rise in deal flow on a quarter-to-quarter basis, from 191 to 209 transactions.
As for the Media & Marketing horizontal, deal activity was relatively consistent with a three percent gain. The Entertainment Content segment increased 14 percent, from 42 to 48 transactions.
Financially sponsored deal volume, after remaining flat from Q3 2013 to Q4 2013, improved seven percent in Q1 2014. In terms of specific verticals, there were two private equity transactions in the Education market that had values above $1 billion during the quarter. This consisted of Charterhouse Capital Partners’ acquisition of SkillSoft for $2.3 billion and Hellman & Friedman’s acquisition of Renaissance Learning for $1.1 billion.