Q1 2017 Information Industry Trends Report

Transaction volume increased seven percent over the past three months, from 1,041 to 1,116. Overall value fell 64 percent, from $189.5 billion to $67.3 billion. The median revenue multiple decreased from 2.3x to 1.9x, while the median EBITDA multiple improved from 11.5x to 13.3x. Disclosed median enterprise value multiples throughout the last five quarters were 2.1x revenue and 11.7x EBITDA.

M&A activity throughout the past five quarters reached its peak in Q2 2016, whereas value reached its zenith in Q4 2016. Of note, six of the Information Industry’s top ten largest acquisitions last year occurred during Q4 2016. These six transactions when combined accounted for slightly more than one-third of total industry value for all of 2016. In addition, aggregate value rose ten percent on a year-over-year basis. The top ten largest transactions represented 53 percent of the industry’s total value in Q1 2017, compared to 79 percent in Q4 2016.

Regarding the industry’s three broad-based horizontal markets, Software volume increased 16 percent in Q1 2017. The Niche segment, which is targeted to specific vertical markets, and the Infrastructure segment were each responsible for four of the horizontal’s top ten highest value deals during the quarter. Deal activity in the Niche segment increased 14 percent, from 237 to 271. Transaction volume in the Infrastructure segment underwent a 27 percent increase, from 71 to 90.

In the Online & Mobile horizontal, volume saw a seven percent quarterly gain. The number of deals in the mobile application subsector increased ten percent, with a total of 116 acquisitions year-to-date.

As for the Media & Marketing horizontal, volume experienced a two percent uptick in Q1 2017. Deal flow in the B2B Publishing and Information segment improved 33 percent on a quarterly basis, from 39 to 52, making it the sector with the horizontal’s largest rise in volume.