Berkery Noyes’ Information report for first half 2015 revealed that total transaction volume rose five percent since second half 2014. Aggregate value was nearly flat at $112.63 billion. Of note, the peak for volume throughout the past two-and-a-half years occurred in first half 2015, whereas value reached its zenith in first half 2014.
In terms of valuations, the median revenue and median EBITDA multiple over the past six months remained about constant at 2.3x and 11.6x, respectively. The industry’s largest transaction in first half 2015 was Permira and CPP Investment Board’s acquisition of Informatica, a provider of enterprise data integration software and services, for $4.77 billion.
Regarding the three horizontal markets covered in the report, the number of transactions in the Software horizontal experienced a three percent uptick. As for software used within specific vertical industries or “Niche Software,” volume increased 11 percent. Four of the horizontal’s top ten highest value deals year-to-date were located in the Niche segment. Two of these four acquisitions took place in the Capital Markets sector.
In the Online & Mobile horizontal market, transaction volume improved 12 over the last three months. The SaaS & Cloud segment underwent a 16 percent rise in volume, which was the most active period for SaaS & Cloud on a half year basis throughout the past two-and-a-half years. M&A volume in the consumer application subsector increased 12 percent, from 119 to 133 transactions.
Deal flow in the overall Media and Marketing horizontal increased two percent over the past six months. Internet Media volume also saw a 25 percent rise, from 208 to 259 deals.
In addition to Verizon Communication’s acquisition of AOL, notable segment deals during first half 2015 included Houghton Mifflin’s acquisition of Scholastic Corporation’s Education and Technology Services business for $575 million; CoStar Group’s acquisition of Apartment Finder, a rental listing marketplace, for $170 million; and Facebook’s acquisition of TheFind, a personalized shopping engine, as the social network looks to bolster its digital advertising business.
“Drawn by strong valuations, once reticent sellers are showing increased receptivity to good offers,” said James Berkery, Chief Information Officer at Berkery Noyes. “Acquirers are motivated by the need to find new growth avenues and are mindful of those nimble, entrepreneurial upstarts nibbling at the edges of their markets.” Berkery continued, “Meanwhile, companies of every stripe are finding ways to package content with the tools and technology that make it easier to access, manipulate, analyze, and distribute information. Most of those who succeed in the solutions business, as the content-plus-tools convergence is often called, do so by acquiring, rather than building, the components they do not own.”