LOCATION BASED APPS AND SOCIAL DISCOVERY M&A

Facebook has made several recent, albeit distinct, mobile acquisitions leading up to its initial public offering (IPO). We’ve discussed the acquisitions of Instagram and Tagtile in our previous posts. With its latest acquisition, Facebook has gained a new technology in the “social discovery” space.

A few days ago, Facebook acquired Glancee, a location based and social discovery app for iOS and Android. Glancee matches users based on interests they have in common or that are relevant to one another. The tool aims to reveal hidden connections. According to PC Magazine, Facebook was also interested in Highlight, one of Glancee’s larger competitors.

Another similar transaction this year was Groupon’s acquisition of Ditto.me, a social recommendation app. Going beyond the check-in feature of many location apps, Ditto.me allows users to ask their friends for suggestions on everything from places they should visit to restaurants they should patronize. As indicated in Berkery Noyes' first quarter Media and Marketing press release, Groupon has been an active acquirer in 2012, completing five Information Industry transactions so far. 

MEDIA AND MARKETING FIRST QUARTER 2012 TRENDS REPORT

Berkery Noyes has released its Media and Marketing M&A trends report for the first quarter. 

The Marketing segment, which saw overall deal activity rise 13 percent, was bolstered by Digital Marketing’s 68 percent rise in volume. According to Kathleen Thomas, managing director at Berkery Noyes, “Content delivery is in the midst of a permanent transformation. Marketers have vast opportunities in front of them to reach customers effectively and efficiently and businesses have compelling new models to attract and monetize end users.”

For example, OwnerIQ’s acquisition of DiJiPOP shows demand in the marketplace for solutions that facilitate the conversion of website visitors into paying customers. Targeted advertising and paid product placements that occur in real time are becoming even more popular among retailers, as highlighted by their more frequent use of social media to identify and engage potential consumers.

In the Entertainment segment, 18 of the 38 deals for the quarter were either video or online games. “Zynga’s acquisition of OMGPOP.com for $180 million demonstrates the potential for M&A in social gaming, an area that appears poised for growth,” said Berkery Noyes managing director Evan Klein.” 

FULL YEAR 2011 TRENDS REPORTS

Berkery Noyes has released eight Full Year 2011 Trends Reports. Here is some commentary from our managing directors based on the first four reports.

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.”

Software Industry:

“Companies involved with cloud computing and SaaS are showing strong levels of M&A activity,” said managing director Christopher Young of Berkery Noyes. “Going into 2012, more businesses will seek to convert from owning and maintaining licensed software to utilizing subscription based cloud solutions. Two of the largest Software deals in 2011, SAP’s acquisition of SuccessFactors and Oracle’s acquisition of RightNow Technologies, demonstrate an ongoing interest of integrating enterprise applications with cloud.”

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.”

THIRD QUARTER 2011 TRENDS REPORTS

Berkery Noyes has released its Third Quarter 2011 Trends Reports. We’ve listed some commentary from our managing directors here.

Media & Marketing Services Industry:

“Interestingly, DPZ was Publicis Groupe’s third acquisition this year in Brazil,” said Berkery Noyes managing director Evan Klein. “As one of the top ten ad markets in the world, I have to think Brazil will continue to garner interest from advertising agencies in the near term."

Software Industry:

“While Hewlett Packard’s offer for Autonomy Corporation PLC highlighted the attractive e-discovery sector, there has been a long history of acquisitions at high transaction multiples in the sector,” said Berkery Noyes managing director Mary Jo Zandy. “This historical trend is expected to be accentuated in the next twenty-four months as the consolidation in the high growth e-discovery market continues. Many of the smaller privately-held companies, some with cloud technologies, are attractive acquisitions for the existing large players and potential new entries.”

Online & Mobile Industry:

Regarding companies that operate in the mobile and online space tracked by Berkery Noyes, managing director Kathleen Thomas notes, “Google made 26 acquisitions in 2010, so with 21 acquisitions through the third quarter, 2011 looks to be another strong year for the industry giant. Overall transaction volume and EBITDA multiples are up significantly from 2010.”

Financial Technology & Information Industry:

“The increase in the number of closed transactions in the third quarter is a direct result of an increasingly more active private equity market, overall pent-up supply of companies wishing to sell, and a strategic buyer market that continues to shore-up product suites and customer bases through acquisitions,” said managing director John Guzzo.

Pharma and Healthcare Information and Technology Industry:

“PerkinElmer has demonstrated the vast potential for informatics and software integration into laboratory environments,” said managing director Jeffrey Smith. "The need to integrate scientific tools, effectively manage knowledge, and organize workflow within laboratory settings is becoming even more crucial for clients of organizations such as PerkinElmer."

Education Industry:

“M&A volume started to look up during the third quarter when a number of large deals were announced,” said John Shea, managing partner at Berkery Noyes. “Hellman & Friedman’s announced plans to acquire SunGard Data Systems' higher education segment and Providence Equity’s acquisition of Blackboard are greater in value than what’s been done in the entire first half. These transactions highlight the innovation that digital technologies are bringing to both the K-12 sector as well as institutions of higher education.”

Private Equity in the Information Industry:

“Notably, two of Thomas H. Lee Partners’ third quarter transactions were related to healthcare. Ignite Health, whose ultimate parent is THL, and Intermedix, which is a consumer and healthcare subsidiary of THL, both made acquisitions. Private equity activity in healthcare technology is likely to be strong going into the near future, as evidenced by Blackstone’s acquisition of Emdeon and Vista Equity Partners’ acquisition of Sage Software in the third quarter,” said managing director Tom O’Connor.

Information Industry:

“It’s an encouraging sign that transaction volume in the Information Industry, examined on a quarterly basis, remains well above its 2010 levels. There has been a consistent trend upward for median EBITDA and revenue multiples too,” said CIO James Berkery. “Indeed, both multiples showed improvement for the third consecutive quarter.”