Search
Social Media
Feedback
This form does not yet contain any fields.

      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Monday
    Jan252016

    MEDIA AND MARKETING DEAL VOLUME RISES THROUGHOUT MOST INDUSTRY SEGMENTS

    Berkery Noyes’ Media and Marketing report for full year 2015 indicated that deal volume improved eight percent on a year-to-year basis. Aggregate value gained 12 percent, from $97.07 billion to $109.01 billion. In terms of valuations, the median revenue multiple moved slightly from 2.0x to 1.9x, while the median EBITDA multiple decreased from 11.0x to 8.7x.

    The Internet Media segment underwent a 19 percent increase in deal activity. Online shopping giant Alibaba Group was a notable segment acquirer with the announced acquisition of Youku Tudou, a Chinese-based Internet television platform that enables users to search, view and share video content across multiple devices, for $3.37 billion. Alibaba, in which Yahoo! owns a 15 percent stake, also completed a related deal in 2014 when it acquired a 60 percent stake in ChinaVision Media Group, a television and film producer.

    The Marketing segment experienced a six percent rise in volume. Of note, there were no Marketing acquisitions that made the industry’s top ten list of highest value deals during the year, as opposed to four in 2014.

    The segment with the largest year-to-year rise in volume was Exhibitions, Conferences, and Events. This sector saw volume increase 33 percent, from 85 to 113 acquisitions. The most active related acquirer in 2015, either directly or through an affiliated business, was Providence Equity Partners with six transactions.

    M&A activity in the Entertainment segment, after rising six percent during 2014, remained constant over the past year. Regarding value, the segment’s largest transaction in 2015 was Activision Blizzard’s acquisition of King Digital Entertainment, creator of the well-known mobile game Candy Crush Saga, for $5.9 billion.

    Deal flow within the B2B Publishing and Information segment improved 11 percent on a yearly basis. In addition, the B2B segment had the industry’s largest rise in value, more than doubling from $9.38 billion to $23.01 billion. This gain was due in part to Intercontinental Exchange’s acquisition of Interactive Data Corporation, a provider of financial market data and analytics, for $7.45 billion.

    “There has been a steady uptick in media mergers and acquisitions activity, with more deals on the horizon and a positive outlook going forward,” said Vineet Asthana, Managing Director at Berkery Noyes. “Companies with a balance of revenue streams, some recurring revenue and more subscription type products in the mix are especially attractive to acquirers.”

    Tuesday
    Jan192016

    SOFTWARE VALUE MAKES SIGNIFICANT STRIDES AS VALUATIONS REMAIN STRONG

    Berkery Noyes’ Software report for full year 2015 showed that deal volume experienced a nine percent year-to-year increase, with a total of 2,028 transactions in 2015. Overall value gained 72 percent, from $123.74 billion to $213.20 billion. This rise was attributable in major part to Dell’s announced acquisition of EMC Corporation for $67.48 billion, which was the highest value deal ever recorded in the industry.

    The EMC acquisition accounted for almost one-third of the industry’s aggregate value in 2015. If excluded, total value gained 18 percent on a yearly basis. With this transaction, Dell is looking to combine its server businesses with EMC’s storage and virtualization assets, enabling it to better compete beyond the PC market with a wider range of products. Also of note, Michael Dell and Silver Lake Partners took Dell private in 2013 for $24 billion.

    In terms of valuations, the median revenue multiple declined from 2.7x to 2.4x, while the median EBITDA multiple improved from 12.0x to 13.8x. Deals in the $10-$20 million range over the past three years received a median enterprise value multiple of 2.3x revenue, whereas those above $160 million had a median enterprise value multiple of 3.6x revenue.

    Financial sponsors were responsible for five of the industry’s top ten largest deals in 2015. Three of these five transactions occurred in the Infrastructure segment. This consisted of The Carlyle Group’s announced acquisition of Veritas Technologies Corporation, a storage and server management software solutions business, for $8 billion; Permira and CPP Investment Board’s acquisition of Informatica, a provider of enterprise data integration software and services, for $4.77 billion; and Thoma Bravo and Silver Lake Partners’ announced acquisition of SolarWinds, an IT management software and monitoring company, for $4.38 billion.

    Meanwhile, the number of deals in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, increased 12 percent. The most active acquirer in the Business segment in 2015 was Microsoft with seven transactions.

    “With the increased adoption of cloud and SaaS environments even software companies are recognizing the innate ability to integrate rather than develop everything,” said James Berkery, Chief Information Officer at Berkery Noyes. “It stands to reason as more software solutions appear on the web that the proliferation of the API has begun to create an integration market unto itself. A sort of API marketplace with brokered solutions, tech enabled services and niche applications is poised to capitalize.”

    Friday
    Nov062015

    EDUCATION DEAL VOLUME AND VALUE SURGES IN THIRD QUARTER 2015

    According to Berkery Noyes’ Education report for third quarter 2015, the number of deals increased 34 percent, from 91 to 122 transactions. Aggregate value rose 45 percent, totaling 6.8 billion in the third quarter. In terms of valuations, the median revenue multiple decreased from 2.4x to 2.0x, while the median EBITDA multiple declined from 11.5x to 10.3x.

    The industry’s largest strategic transaction in third quarter 2015 and year-to-date was TPG Capital and Leonard Green Capital Partners’ announced acquisition of Ellucian, which provides higher education software, services and analytics, for $3.5 billion. Ellucian also made an acquisition earlier in the year with Helix Education’s learning management system (LMS) in the second quarter. Providing some more historical background, Hellman & Friedman acquired SunGard Higher Education from SunGard Data Systems for $1.8 billion in 2011. This resulted in a merger under a new holding company with Datatel, which was rebranded as Ellucian.

    As for the combined Professional Training Technology and Services segment, volume increased 48 percent on a quarterly basis, from 29 to 43 transactions. In terms of high profile third quarter deals relating to the continuing medical education (CME) sector, Premier acquired CECity.com for $400 million; Wolters Kluwer Health acquired Learner’s Digest International for $150 million; and Relias Learning acquired Academy Medical

    “Close to 90% of K-12 education spending in the U.S. is funded by state and local governments,” said Peter Yoon, Managing Director at Berkery Noyes. “Partially spurred on by the recession, and as the state and local budgets continue to recover, administrators are becoming more open to utilizing technology based solutions to effect outcomes in a cost-effective manner. Investors, in turn, have realized the secular change transforming the sector and have dramatically increased investment in the space.”

    “The education sector has been very active of late,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “In particular, companies that are online and digital are the most attractive acquisition candidates. Many companies are readily available to be acquired by private equity firms as well, which can borrow on attractive terms to purchase them.” Zandy continued, “It’s also worth noting that the education market seems to be bifurcated. Anything that has growth is selling for a nice multiple. But trying to sell a publisher that is print only is challenging and although print is still widely used in the classroom, the long-term trends favor digital content, data analytics, and assessment tools.”

    Monday
    Oct262015

    VOLUME, VALUE, AND VALUATIONS TRENDING UPWARD IN THE FINTECH INDUSTRY

    Transaction volume in Berkery Noyes’ Financial Technology and Information report for third quarter 2015 increased nine percent over the past three months. Aggregate deal value more than doubled, from $9.5 billion to $20.9 billion.

    This was the peak for value throughout the past year-and-a-half on a quarterly basis and was attributable in large part to FIS’ announced acquisition of financial software company SunGard Data Systems for $9.1 billion. In terms of valuations, the median revenue multiple from 2014 through the first three quarters of 2015 improved slightly from 3.0x to 3.2x, while the median EBITDA multiple rose from 13.3x to 15.2x.

    M&A activity in the Capital Markets segment increased nine percent over the previous quarter and 58 percent year-to-date when compared to the corresponding timeframe in 2014. Deutsche Börse Group completed the segment’s two largest deals during third quarter 2015 with the acquisition of 360T, a provider of web-based trading technology, for $796 million; and joint ventures STOXX and Indexium, two European-based index groups, from SIX Group for $701 million.

    Other notable Capital Markets related transactions included FactSet Research Systems’ acquisition of Portware, a developer of broker-neutral automated trading solutions, for $265 million; Computer Sciences Corporation’s acquisition of Fixnetix, a provider of outsourced high speed trading, data and IT services, for $113 million; Playtech’s acquisition of Ava Trade, a foreign exchange trading platform, for $105 million; DMA Corporation’s acquisition of Baker Hill Corporation, which offers relationship management, credit-origination and risk management solutions, for $100 million; and Blackrock’s acquisition of FutureAdvisor, an technology-enabled digital wealth management company. “Big data is increasing the demands on trading, modeling, executing, and portfolio management,” said Peter Ognibene, Managing Director at Berkery Noyes. “The variety of risk profiling and stress testing that financial institutions will be subjected to requires more analytical capabilities.”

    There was also a 16 percent year-over-year volume increase in the Banking segment, from 44 to 51 transactions. Notable segment deals during third quarter 2015 included Envestnet’s acquisition of Yodlee, a financial data aggregator and provider of online financial tools, for $590 million; and SS&C’s acquisition of Primatics Financial, an accounting, forecasting, regulatory reporting, reserving and stress testing solutions company, for $122 million. SS&C completed a major deal earlier in the year as well with the acquisition of Advent Software, a provider of portfolio management and accounting systems software, for $2.6 billion.

    “Banks and credit unions are encountering a new regulatory framework, in which improved technology and automated solutions are increasingly necessary to maintain compliance,” stated John Guzzo, Managing Director at Berkery Noyes. “Regulations are having a noticeable impact on electronic record keeping, social media monitoring, and oversight of traditional marketing practices. The greater focus on enforcement is encouraging financial institutions to become more proactive in meeting regulatory mandates.”

    Monday
    Oct192015

    ONLINE AND MOBILE DEAL VOLUME RISES ON A YEAR-OVER-YEAR BASIS

    Total volume in Berkery Noyes’ Online and Mobile report for third quarter 2015 declined seven percent on a quarterly basis, from 713 to 663 transactions. Aggregate value fell 17 percent, from $45.5 billion to $37.7 billion. When compared to the first three quarters of 2014, the number of deals year-to-date rose 15 percent while value remained about constant.

    M&A activity in the E-Commerce segment decreased seven percent relative to the second quarter. However, this represented an eight percent rise year-to-date compared to same time period in 2014. The largest E-Commerce deal in third quarter 2015 and year-to-date was home shopping channel QVC’s acquisition of Zulily, an online retailer that primarily serves millennial moms, for $2.1 billion. Traditional retailers have also been looking to strengthen their online presence by making acquisitions with a focus on the millennial market. For example, department store chain Nordstrom completed a related deal in 2011 with the acquisition HauteLook, which offers flash discount sales, for $180 million.

    The number of mobile application deals, after remaining about constant from first to second quarter 2015, declined 13 percent in the third quarter with a total of 96 transactions. High profile acquirers in the mobile space during the third quarter included Adidas’ acquisition of Runtastic, a fitness tracking application, for $239 million; Accenture’s acquisition of Chaotic Moon Studios, a mobile software design and development studio; and Snapchat’s acquisition of Looksery, a face tracking and modification application, for a reported $150 million.

    Transaction volume in the Communications segment improved 42 percent, from 52 to 74 deals. One notable acquirer was Blackberry with the acquisition of Good Technology, a mobile security solutions business, for $425 million. Blackberry completed another industry deal in the first quarter with the acquisition of WatchDox, an enterprise document security company. This continues a steady pace of M&A activity for the smartphone manufacturer.

    Blackberry also completed several acquisitions in 2014 with Secusmart, a security voice and data encryption company; and Movirtu, a provider of virtual identity solutions. Regarding other high profile segment acquirers in third quarter 2015, Turner Broadcasting Systems acquired iStreamPlanet, which provides cloud-based video streaming technology, for $200 million; and Amazon Web Services acquired Elemental Technologies, a supplier of software-defined video solutions and over-the-top TV (OTT) content delivery.

    “As the decline in print advertising continues, we’re seeing certain publishers become acquisitive in the ad tech sector,” said Vineet Asthana, Managing Director at Berkery Noyes. “Programmatic buying, native advertising, and retargeting presents an opportunity for the traditional media players to reach their audiences on a variety of platforms. Moreover the ad tech space is getting crowded and should be ripe for consolidation moving forward. Acquirers in the middle market seem to be especially keen on picking up digital companies that have either a regional focus or differentiated technological offerings.”