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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Online (23)

    Friday
    Aug182017

    ONLINE M&A VOLUME BEING DRIVEN BY THE COMMUNICATIONS AND E-COMMERCE SEGMENTS

    Berkery Noyes’ Online and Mobile report for first half 2017 revealed that transaction volume increased five percent on a half year basis. Of note, private equity deal activity rose 21 percent. Aggregate industry value fell 37 percent, from $83.25 billion to $52.62 billion. There were five transactions in first half 2017 with disclosed vales above the $1 billion threshold, compared to 16 such deals in second half 2016. The peak for volume and value over the last 30 months occurred in first half 2016.

    As for the Communications segment, volume improved 15 percent in first half 2017, making it the sector with the largest gain in deal activity. High profile segment transactions year-to-date included Atlassian’s acquisition of Trello, a web-based collaboration software and project management service, for $425 million; and BICS’ announced acquisition of TeleSign, a communications platform as a service (CPaaS) company focused on authentication and mobile identity services to Internet and digital service providers, for $230 million.

    M&A activity in the E-Commerce increased 12 percent in first half 2017. Notable segment transactions year-to-date included PetSmart’s acquisition of Chewy, an online retailer for pet products, for $3.35 billion; Amazon’s announced acquisition of Souq, a Dubai-based online retailer, for a reported $650 million; and CVC Capital Partners’ announced acquisition of Etraveli, a global e-commerce platform for flight tickets, for $569 million.

    Deal volume in the E-Marketing & Search segment decreased three percent on a half year basis. Notable segment transactions thus far in 2017 included Oracle’s acquisition of Moat, an ad measurement company, for a reported $850 million; and Vector Capital’s acquisition of Experian’s Cross-Channel Marketing business for $300 million.

    “Programmatic buying, native advertising, and retargeting presents an opportunity for the traditional media players to reach their audiences on a variety of platforms,” said Vineet Asthana, Managing Director at Berkery Noyes. “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.”

    Friday
    May192017

    MOBILE APPLICATION M&A VOLUME REMAINS STRONG

    Berkery Noyes’ Online and Mobile report for Q1 2017 indicated that deal volume increased seven percent in over the past three months. Total transaction value declined 49 percent, from $38.9 billion to $19.9 billion. Both aggregate volume and value throughout the past five quarters reached their peak in Q2 2016. The number of transactions in the mobile application subsector improved ten percent on a quarterly basis, with a total of 116 acquisitions in Q1 2017.

    Notable mobile-based deals during the quarter included United Luck Consortium’s $1 billion acquisition of Outfit7, a media franchise with various mobile applications, which have received more than 5 billion downloads; Take-Two Interactive Software’s acquisition of Social Point, a mobile game developer, for $250 million; and ABRY Partners’ announced acquisition of MobileHelp, a provider of mobile medical alert and personal health management solutions, for $130 million.

    E-Marketing & Search volume improved nine percent in Q1 2017. Notable digital marketing deals in the segment year-to-date included Amobee’s acquisition of Turn, an advertising technology company used by marketers and agencies, for $310 million; Altice’s announced acquisition of Teads, an online video advertising company, for $306 million; and Accenture Interactive’s announced acquisition of a majority stake in SinnerSchrader, a digital marketing and advertising agency based in Germany, for $62 million.

    “Digital marketing solutions that are able to extract insights from the growing amounts of data and effectively engage consumers across multiple channels are highly valued in today’s market,” said Vineet Asthana, Managing Director at Berkery Noyes. “Technology companies, consulting firms, and others are eager to gain market share by seeking a larger array of service offerings to complement their existing product and solution portfolios, especially since enterprises are requiring an increasing amount of data management services.” Asthana continued, “Many large players, both financial and strategic, are actively pursuing inorganic growth through acquisition, as the marketing automation market is still rapidly expanding.”

    Tuesday
    Jan312017

    E-COMMERCE TRANSACTION VOLUME RISES IN THE ONLINE & MOBILE INDUSTRY

    According to Berkery Noyes’ Online and Mobile report for full year 2016, volume saw a one percent uptick on a year-to-year basis, totaling 2,874 transactions in 2016. Aggregate deal value gained 12 percent, from $157.99 billion to $177.35 billion.

    The number of acquisitions in the consumer mobile application subsector remained about constant from 2015 to 2016. Notable mobile-based transactions in the gaming sector during 2016 included Tencent Holdings’ acquisition of Supercell, the Finnish maker of the “Clash of Clans” game, for $8.6 billion; and a Chinese consortium’s announced acquisition of Playtika, a social and mobile games company headquartered in Israel, for $4.4 billion.

    Additional mobile deals by high profile acquirers in 2016 were Microsoft’s announced acquisition of Swiftkey, which provides predictive keyboard technology for Android and iOS devices, with a reported purchase price of approximately $250 million; Gopro’s announced acquisition of video editing apps Replay and Splice for $105 million; Snap (formerly known as Snapchat) with the acquisition of Vurb, a mobile search and discovery engine, for a reported $110 million; and Bitstrips, which allows users to create personalized emojis and carton avatars, for a reported $100 million; and CNN’s announced acquisition of Beme, a social media app founded by YouTube star Casey Neistat, for a reported $25 million.

    The E-Commerce segment was responsible for the overall industry’s largest yearly rise in volume with an 11 percent increase. One of the most high profile E-Commerce transactions during the past year was Wal-Mart’s acquisition of Jet.com, an online retailer, for $3.3 billion, as the retail giant looks to bolster its online operations to better compete with Amazon and others.

    Other notable segment deals included Salesforce’s acquisition of Demandware, a provider of digital commerce solutions used by retailers, for $2.66 billion; Ctrip’s announced acquisition of Skyscanner, a global travel search site that offers online comparisons for millions of flight, car hire and hotel prices, for $1.74 billion; Thoma Bravo’s acquisition of Trader Corporation, a digital automotive marketplace, for $1.22 billion; and Alibaba Group’s acquisition of a controlling stake in Lazada, an E-Commerce platform that serves consumers in Southeast Asia, for $1 billion.

    As for other sectors covered in the report, volume in the Communications segment stayed nearly the same on a yearly basis. Meanwhile, deal activity in the E-Content segment decreased eleven percent year-over-year. This followed a 21 percent rise in 2015. Transaction activity in the E-Marketing & Search segment increased three percent throughout the last 12 months. 

    “Given the market’s emphasis on data and the increased demand for analytics solutions, companies in this sector should expect to see premium valuations,” said Vineet Asthana, Managing Director at Berkery Noyes. “Before, marketers had few data points and completely relied on humans to source leads. As we moved toward the digital era, the amount of data points that a typical marketer has to interpret every day has skyrocketed.” Asthana continued, “Machine learning has the ability to extract patterns from huge volumes of data which have high velocity and variety. Predictive analytics and machine learning are transforming the way marketers evaluate and respond to consumer activity in milliseconds and cross channel digital marketing is rapidly taking hold.”

    Tuesday
    Feb162016

    ONLINE AND MOBILE DEAL VALUE PICKS UP MOMENTUM IN THE SECOND HALF OF 2015 

    According to Berkery Noyes’ Online and Mobile report for full year 2015, transaction volume increased 12 percent on a year-to-year basis. Aggregate deal value gained 19 percent, from $131.16 billion to $156.49 billion. Five of the top ten largest transactions in 2015 occurred during the fourth quarter. These five deals, with a combined value of $22.79 billion, accounted for 15 percent of the industry's aggregate value. The median revenue multiple decreased from 2.4x to 2.2x, while the median EBITDA multiple declined from 13.1x to 10.0x.

    The SaaS & Cloud segment was responsible for the overall industry’s largest yearly rise in volume with a 21 percent increase. SaaS & Cloud acquisitions from 2013 through 2015 saw a median revenue multiple of 2.6x and median EBITDA multiple of 11.9x.

    M&A volume in the E-Commerce segment increased 16 percent in 2015. Upon examination of value, the largest E-Commerce acquirer in 2015 was online travel company Expedia with a combined total of $4.94 billion paid in transaction value.

    Transaction activity in the E-Marketing & Search segment declined three percent throughout the last 12 months. This followed a 19 percent improvement from 2013 to 2014. Deal flow remained strong in the ad tech sector during 2015, as indicated by notable transactions such as Twitter’s acquisition of TellApart for $653 million; Nielsen’s acquisition of eXelate for $200 million; The Rubicon Project’s acquisition of Chango for $122 million; and AppNexus’ acquisition of Yieldex, for $100 million.

    “Companies that can differentiate their offerings from the average digital and mobile-based ad tech players are performing well,” said Vineet Asthana, Managing Director at Berkery Noyes. “Potential acquirers include large telecommunications firms, traditional B2B media companies, and offline data providers that are looking for a digital platform. Furthermore many advertising networks without programmatic technology capabilities want to expand their suite of solutions to help better automate their marketing campaigns.” 

    The Communications segment underwent an 11 percent improvement in volume. Notable segment deals in 2015 included Siris Capital Group’s acquisition of Premiere Global Services, Inc. (PGi), a provider of collaboration software and services, for $979 million; Cisco Systems’ announced acquisition of Acano Limited, a conferencing software business, for $700 million; and Atos’ announced acquisition of Unify, an integrated communications company, for $427 million.

    In terms of other notable industry trends, there were several deals completed by high profile acquirers in 2015 relating to the Internet of Things (IoT). This included Cisco Systems’ acquisition of ParStream, IBM’s acquisition of StrongLoop, Autodesk’s acquisition of SeeControl, and Amazon’s acquisition of 2lemetry.

    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.”