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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Vineet Asthana (7)

    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
    Jan242017

    TRANSACTION VALUE SURGES IN THE MEDIA & MARKETING INDUSTRY

    Berkery Noyes’ Media and Marketing report for full year 2016 showed that deal volume declined five percent on a year-to-year basis. Aggregate value more than doubled, from $105.67 billion to $272.17 billion. The rise in value was due in major part to AT&T’s announced acquisition of Time Warner for $105.27 billion, or $85.4 billion if net debt is excluded.

    This was the highest value deal ever tracked by Berkery Noyes in the Media & Marketing Industry. If the Time Warner deal is omitted, overall value increased 58 percent. The Time Warner transaction is being referred to as a vertical merger, in that two different kinds of businesses are being combined. AT&T is planning to diversify its business beyond telecommunications with Time Warner’s vast array of programming.

    The Internet Media segment underwent a ten percent yearly decrease in deal activity. This followed a 21 percent rise in 2014. Notable segment transactions during 2016 included Microsoft’s acquisition of LinkedIn, a business social networking site, for $25.93 billion; AOL’s announced acquisition of Yahoo’s core operating business for $4.83 billion; Ctrip’s announced acquisition of Skyscanner, a global travel search site, for $1.74 billion; Ziff Davis’ acquisition of Everyday Health, a digital media company that produces content relating to health and wellness, for $465 million; and Randstad Holding’s announced acquisition of Monster Worldwide, an online jobs site, for $429 million.

    The Marketing segment, which for the purposes of this report excludes pure software-based companies, experienced a two percent yearly uptick in volume. Meanwhile, volume in the digital marketing subsector increased seven percent throughout the past twelve months.

    “Advertisers are rapidly exploring various digital options,” said Vineet Asthana, Managing Director at Berkery Noyes. “Their revenue mix continues to tilt toward digital at the expense of print, while events hold their steady level of the share of the total.” Asthana continued, “Advertisers are actively searching for media strategies that utilize multiple platforms to reach their target audiences. Historically, their core competencies have not always included mastering the intricacies of digital, print, events, and cross-media marketing. New digital platforms are creating more opportunities to reach specific target groups effectively.”

    M&A activity in the Entertainment segment increased four percent year-over-year. High profile Entertainment deals in 2016 included Lionsgate’s acquisition of Starz, a media and entertainment company that provides premium movie and original programming services, for $4.4 billion; NBC Universal’s acquisition of DreamWorks Animation, which creates animated feature films and television programs, for $4.1 billion; IMG Worldwide’s acquisition of Ultimate Fighting Championship, a professional mixed martial arts organization, for $4 billion; and Dalian Wanda Group’s acquisition of Legendary Entertainment, a media company with film, television, and digital divisions, for $3.5 billion. 

    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
    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.”