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    "2011 was a successful year for M&A in the education industry across most sectors in terms of activity and valuations," said Berkery Noyes managing director Mary Jo Zandy. "This momentum has further built in the first quarter of 2012. Areas of most interest to acquirers at the present time are online education, education services and education technology companies. Still, consolidation is ongoing among print-based education businesses, and the anticipated effects of common core standards implementation are likely to accelerate this trend."



    These managing director quotes pertain to our Pharma & Healthcare Industry report:

    “In 2011, M&A-driven expansion of strategic healthcare technology and information platforms by major players, some private equity-backed, continued as a dominant trend, stated Jeffrey Smith, Managing Director in Berkery Noyes’ Healthcare and Life Sciences group. “This trend will continue in 2012, offering an active market, competitive sales processes, and excellent valuation opportunities for independently-owned companies providing software, information, data, communications and services solutions to the healthcare and life science industries.”

    “The healthcare information and technology (“HIT”) mergers and acquisitions market was robust in 2011 as buyers looked to acquire rapidly growing companies, principally software enabled solutions (SaaS and Cloud enabled), in highly attractive niches to accelerate their own growth and offer fuller suites of world class products to the dynamic and growing healthcare marketplace,” said Tom O'Connor, Managing Director in Berkery Noyes’ Healthcare and Life Sciences group. “In 2012, we expect to see an increased deal flow and attractive prices for sellers from both strategic and financial buyers, but strategic buyers, like in 2011, will dominate the buyer universe.”

    According to Jonathan Krieger, Managing Director in Berkery Noyes’ Healthcare and Life Sciences group, “the number of HIT transactions increased for the 3rd consecutive year and valuation multiples continued to rise. The enactment of the HITECH Act has catalyzed the adoption of IT by both payors and providers and has resulted in a very favorable M&A market for private companies that wish to pursue liquidity events.”



    Berkery Noyes has released eight Full Year 2011 Trend Reports. Here is some commentary from our managing directors.

    Media & Marketing Industry:

    “The Media and Marketing Industry is continuing its strong recovery from a slow Fourth Quarter in 2010,” said Evan Klein, Managing Director at Berkery Noyes. “Marketing services and digital media companies have all benefited from a large increase in internet advertising revenues in 2011, and look to be promising segments for driving M&A activity.”

    Online & Mobile Industry:

    “M&A activity for social media and analytics companies continues to grow as a broader range of players seek to capitalize on this evolution in media and marketing communications,” said Kathleen Thomas, Managing Director at Berkery Noyes. “The world’s largest retailer, Walmart, entered the market in April with their $300 million acquisition of Kosmix Corporation, and Kosmix, now known as @WalmartLabs, has already completed four deals.”

    Financial Technology Industry:

    “At present we are seeing destructive creativity going on in a number of financial service sectors,” said Peter Ognibene, Berkery Noyes managing director. “For instance, smart phones have become digital wallets and are enabling a host of banking and other mobile commerce activities. There has also been an increase in consumer focus on wealth management strategies. And as always in times of turmoil and uncertainty – there is a desire for more precise and forward looking risk management tools, especially enterprise-wide.”



    By Joe Berkery

    M&A transaction value and volume are returning to pre-recession levels, according to the latest Berkery Noyes research. The total number of transactions (volume) for the six months to October 21, 2011 was 1,163, higher than the previous peak of 1,070 recorded for the six months prior to April 21, 2007, reflecting strong interest from both buyers and sellers. Fewer deals at the larger end of the spectrum drove down aggregate deal values, reflecting the greater concentration of activity among smaller and mid-sized companies in the $25 million to $200 million range.

    Enterprise values were determined to be 1.9 X revenues, with multiples of EBITDA (earnings before interest, tax, depreciation and amortization) at 12.3 X. Though this is below the market peak during mid-2007, the uptred is both clear and significant.   




    By Joe Berkery

    The first three quarters of 2011 have been busy for Berkery Noyes, with 15 transactions closed during the period and several more scheduled to close during the fourth quarter. What’s remarkable about these transactions is the high level of buyer interest and strong valuations each one has received. Despite uncertainty in the wider economy, M&A activity is on track to equal or exceed the pace established during the pre-recession boom.

    The brisk pace of M&A is apparent across most of the segments we cover, including the information, software, media, entertainment, technology, finance, healthcare, and education industries. For information about these transactions, visit the recent transactions section of our website.

    The increase in transaction volume has prompted Berkery Noyes to expand its investment banking capacity. During the past year we have added three new managing directors, along with additional team members at the vice president and associate/ analyst levels to support them. We expect the elevated pace of transactions to continue at least through the next 14 months as corporate and financial buyers look to deploy abundant cash reserves through acquisitions, and as sellers act ahead of changes in the tax code which may drive up the cost of a sale after 2013 (mentioned in the previous post).