tag:blogger.com,1999:blog-7961469799502761472024-02-08T11:27:00.298-08:00Venture Capital ReportJonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.comBlogger244125tag:blogger.com,1999:blog-796146979950276147.post-32007938788395689782018-01-05T14:25:00.001-08:002018-01-05T14:25:13.503-08:00 Exploring the Intricacies of Venture Capital Valuations<span style="font-family: inherit;"><span style="font-size: small;">
</span></span><span style="font-family: inherit;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: inherit;"><span style="font-size: small;"><span style="color: #333333; line-height: 20px;">
<em><span style="color: black;">A frequently
used measure of the value of a private venture-backed company can
overstate the company's worth because prices and conditions vary in
successive rounds of financing. </span></em></span></span></span><br />
<br />
<span style="font-family: inherit;"><span style="font-size: small;">
</span></span><span style="font-family: inherit;"><span style="font-size: small;"><span style="color: #666666; line-height: 15px;">
Private companies worth more than $1
billion — so-called "unicorns" — are frequently overvalued, according to
a study of 135 such firms. Fast-growing firms are always hard to value,
but the largest challenge in valuing these firms is their complex
financial structure. Shares in such companies differ in important ways
from common stock and even from publicly traded preferred equity, and
there can be significant differences between the shares offered in
different financing rounds. </span></span></span><br />
<br />
<span style="font-family: inherit;"><span style="font-size: small;">
</span></span><span style="font-family: inherit;"><span style="font-size: small;"><span style="color: #666666; line-height: 15px;">
"These financial structures and their valuation implications can be
confusing and are grossly misunderstood not just by outsiders, but even
by sophisticated insiders,"
<a href="http://www.nber.org/people/will_gornall" rel="noopener noreferrer" target="_blank"><span style="color: #007ac0;">William Gornall</span></a> and
<a href="http://www.nber.org/people/ilya_strebulaev" rel="noopener noreferrer" target="_blank"><span style="color: #007ac0;">Ilya A. Strebulaev</span></a> write in <b>Squaring Venture Capital Valuations with Reality</b> (NBER Working Paper No. <a href="http://www.nber.org/papers/23895" rel="noopener noreferrer" target="_blank"><span style="color: #007ac0;">23895</span></a>). Their preferred estimates suggest that, on average, reported values overstate valuations by about 50 percent. <br /><br />
The researchers illustrate the issues involved by considering the
valuation and funding history of Square Inc., a payment technology firm.
In October 2014, the firm raised $150 million by selling 9.7 million
Series E Preferred Shares to investors for $15.46 apiece. If the company
did well, the shares paid off the same as common shares. But if the
company failed or was acquired, Series E investors were still guaranteed
to get at least $15.46; in the case of an initial public offering,
they'd get a minimum of $18.56. The company had already sold Series A,
B-1, B-2, C, and D preferred shares, each with different cash-flow,
liquidation, control, and voting rights.<br /><br />
After the Series E round, Square got a "post-money valuation" — the
venture capital industry's main metric for determining company value —
of $6 billion (388 million shares multiplied by $15.46). The researchers
point out that this simple calculation did not recognize that all
shares were not created equal. They develop a model to account for these
differences and conclude that a more realistic total value would have
been $2.2 billion. A year later, the company went public at $9 a share,
far below the $15.46 used in the post-money valuation. The researchers
are not suggesting that the valuation of any share class is incorrect,
just that the use of the price of a single share class to value all of
the outstanding shares can be inappropriate when trying to calculate a
firm's aggregate valuation.<br /><br />
Failure to account for heterogeneity in outstanding share
characteristics is common, and may lead to systematic overstatements of
the total value of a firm's equity. The researchers consider 135 firms
that have been reported as worth more than $1 billion, and they conclude
that on average, the reported valuation is 50 percent greater than the
estimate from their modeling. Their analysis suggests that 65 of the 135
firms were worth less than $1 billion.<br /><br />
The researchers point out that even if a company's business prospects
are falling, if later share classes are issued with more generous terms
for investors, it is possible that the reported share price will rise
over time and result in increases in the firm's post-money valuation.<br /><br />
Developing accurate measures of the value of venture-capital-backed
firms may be increasingly important as new classes of investors begin
holding shares in these companies. Mutual funds have begun investing in
these firms, and even individual investors are participating in these
firms through third-party marketplaces. While still a small fraction of
fund assets, mutual-fund purchases of unicorns have soared tenfold in
three years.
</span></span></span><br />
<span style="font-family: inherit;"><span style="font-size: small;">
<span style="color: #666666; line-height: 15px;">
— <i>Laurent Belsi</i></span></span></span>Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-20603589695057726122017-12-18T13:20:00.003-08:002017-12-18T13:20:54.343-08:00The state of the deal | M&A trends 2018 - Deloitte
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-mergers-acquisitions-2018-trends-report.pdf">This report </a>is the result of a survey of more than 1,000 executives to gauge their
expectations for M&A activity in 2018 and to better understand their
experience with prior transactions.All survey participants work in either
private or public companies or private equity firms with annual revenues of $10
million or greater. The participants consist of senior executives
(director-level or higher) involved in M&A activity. One-third of corporate
respondents work in the C-Suite, while half of private equity respondents are
involved in fund management.</span></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Corporations and private equity firms foresee an acceleration of merger
and acquisition (M&A) activity in 2018—both in the number of deals and the
size of those transactions.In Deloitte’s fifth M&A trends report, we heard
from more than 1,000 executives at corporations and private equity firms about
the current year and their expectations for the next 12 months. The results
point to strong deal activity ahead: About 68 percent of executives at US-headquartered
corporations and 76 percent of leaders at domestic-based private equity firms
say deal flow will increase in the next 12 months. </span></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Further, most respondents
believe deal size will either increase (63 percent) or stay the same (34
percent), compared with deals brokered in 2017.Since our previous annual
survey, the environment for domestic M&A has been muted due to concerns
about, among other things, the economy, political and regulatory uncertainty,
market volatility, and valuations. While those concerns are all diminishing
according to findings from our new survey, 1 in 8 respondents cites delayed legislation
as a potential obstacle ahead. That concern could abate if significant
pro-business legislation, including tax reform, materializes in the coming months.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Key
Findings</span></b></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Tools and technology are making an impact</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Almost two-thirds of
respondents (63 percent) are going beyond the spreadsheet and using new M&
A technology tools to assist with reporting and integration. Respondents say
the tools help reduce conflicts, costs, and time—likely key factors in making more
deals work.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">In it for the technology</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Technology acquisition is the new No. 1
driver of M& A pursuits, ahead of expanding customer bases in existing
markets, or adding to products or services. Talent acquisition continues to
trend upward as a motivation for M& A strategies. In a new question in this
year’s survey, 12 percent of respondents cite digital strategy as the driving
force behind M& A deals for the coming year; combined, acquiring technology
or a digital strategy accounted for about a third of all deals being pursued.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Bigger
firms are more confident</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Corporate executives and private equity investors from
the largest firms—with revenues and investments in excess of $1 billion—are
considerably more confident than their smaller counterparts that they will
engage in bigger deals in the coming year.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Deals are working better</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Only a
handful of corporate respondents (12 percent) say that a majority of their
M& A deals are not generating the expected return on investment. This is
down from just under 40 percent in spring 2016. An even slimmer number of
private equity survey respondents (6 percent) say that a majority of their deals
are missing the mark—this is consistent with what respondents reported a year
ago and continues the downward trend from a high of 54 percent back in spring
2016.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Full speed ahead for divestitures</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Divestitures should persist as a major
focus in 2018. Seventy percent of survey respondents plan to shed businesses
next year—driven by financing needs and strategy shifts.</span></div>
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<b><span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Driven by convergence</span></b></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;">Industry
and sector convergence continue to be major themes, with a strong bias toward
vertical integration. Top industries that respondents predicted to experience
convergence are life sciences and health care, technology, and financial
services.</span></div>
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<span style="font-size: 16.0pt; mso-bidi-font-size: 10.0pt;"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-mergers-acquisitions-2018-trends-report.pdf">Complete report </a></span></div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-61274329349368851862017-11-14T06:34:00.006-08:002017-11-14T06:34:58.447-08:00 Pace of M&A Deals in Social Media Industry Slows After Record Year Blog <h1 id="articleTitle">
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Technology-company M&A slowed down significantly over the last year, with <a class="logclick ct_cont" href="https://media2.mofo.com/documents/1710-451-manda-leaders-survey.pdf" target="_blank">deal volume down by 15%</a>
across the globe in Q3 of 2017 compared to Q3 of 2016, and a $37
billion decline to $119 billion in Q3 2017 tech-company deal value
compared to the same quarter in 2016.<br />
<br />
“Outbidding by private equity acquirers” was the primary cause of the
plunge, according to almost half (48%) of the industry decision makers
who responded to the <a class="logclick ct_cont" href="https://www.mofo.com/special-content/spotlight-ma-and-leaders-survey/" target="_blank">Tech M&A Leaders’ Survey</a>
from 451 Research and Morrison & Foerster. Indeed, 2017 was the
first year in history that private equity firms announced more
technology mergers and acquisitions than companies listed on U.S.
exchanges.<br />
In line with these trends have been the companies that fall within
the tech industry’s social media subsection—defined by a spokesperson
from <a class="logclick ct_cont" href="https://index.co/top/market/social-media/acquisitions/2017" target="_blank">Index</a>,
the source of the data cited here, as “companies that actually own and
operate social media platforms, companies that provide services
surrounding social media platforms (such as analytics and marketing
automation), or companies that operate through social media.”<br />
<br />
Thus far in 2017, social media companies have been involved in only <a class="logclick ct_cont" href="https://index.co/top/market/social-media/acquisitions/2017" target="_blank">58 deals</a>. That slowdown comes on the heels of the biggest year for social-media-company M&A yet, 2016, when there were <a class="logclick ct_cont" href="https://index.co/top/market/social-media/acquisitions/2016" target="_blank">136 deals averaging $1.6 billion in value</a><u>.</u> The biggest of those deals, Microsoft’s acquisition of LinkedIn for $26.2 billion, was also the <a class="logclick ct_cont" href="https://techcrunch.com/gallery/the-11-biggest-tech-acquisitions-of-2016/slide/3/" target="_blank">third-biggest tech-company acquisition in 2016</a>.<br />
<br />
Struck after LinkedIn’s trading price had <a class="logclick ct_cont" href="https://www.forbes.com/sites/quora/2016/06/20/5-questions-about-the-linkedin-microsoft-deal-answered/#1348c2ab1e97" target="_blank">dropped</a> to just <a class="logclick ct_cont" href="https://www.forbes.com/sites/quora/2016/06/20/5-questions-about-the-linkedin-microsoft-deal-answered/#12942e21e97a" target="_blank">a bit more than half of its $250-per-share high on the market</a>,
Microsoft’s acquisition of the career-networking site might “prove to
be a harbinger of what’s to come for many of those social media
companies that did end up going public,” wrote <em>Mashable</em>’s Seth
Fiegerman, observing that “many of the flashy social networks that Wall
Street once fawned over—even if it didn’t understand what exactly they
do—are now looking for the exit door as the mood sours.”<br />
<br />
Other industry observers <a class="logclick ct_cont" href="http://www.investors.com/news/technology/click/bold-tech-ma-predictions-for-2017-netflix-twitter-gopro-in-play/" target="_blank">also predicted the acquisition of Twitter</a>, as well as <a class="logclick ct_cont" href="http://www.businessinsider.com/google-offered-to-buy-snapchat-for-at-least-30-in-early-2016-insiders-say-2017-8" target="_blank">Snapchat</a> and <a class="logclick ct_cont" href="http://www.businessinsider.com/6-tech-companies-most-likely-to-be-acquired-morgan-stanley-2016-9/#1-take-two-interactive-software-1" target="_blank">Yelp</a>. With all three of those big names yet to be purchased, those predictions obviously didn’t pan out.<br />
<br />
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Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-53778403086546163172017-10-17T11:19:00.000-07:002017-10-17T11:19:23.824-07:00Morrison & Foerster semi-annual M&A Leaders SurveyMorrison & Foerster,
a leading global law firm, today announced the results of its
semi-annual M&A Leaders Survey, in which the prevailing view is
that technology M&A activity will accelerate over the course of
2017. Slightly more than half of the respondents (52 per cent)
forecast that deal flow will top last year's level; this group
represents more than three times the 15 per cent of respondents who
expect year-over-year activity to decline in 2017. Also, the
majority of respondents (54 per cent) forecast an increase in
private equity activity as compared with 2016.
<img src="http://www.mondaq.com/images/article_images/629734a.jpg" /><br />
The survey follows a relative slowdown in the number of deals
during the first quarter of the year, though there was an increase
in aggregate value. According to 451 Research's M&A
KnowledgeBase, there were 912 deals with an aggregate value of USD
77 billion in Q1 2017, compared to 1,065 deals with an aggregate
value of $74 billion in Q1 2016. However, 2017 comes after two
years of the highest tech M&A spending since the Internet
bubble burst. Collectively, acquirers in 2015 and 2016 announced
deals valued at more than USD 1 trillion, according to the M&A
KnowledgeBase.<br />
"The survey forecast represents the most bullish outlook in
two years," said Robert Townsend, co-chair of Morrison &
Foerster's Global M&A Practice Group. "The slight
slowdown in Q1 activity is almost entirely attributable to less
shopping by corporate acquirers. Still, we are encouraged by the
optimism around tech M&A in the U.S. for the rest of the
year."<br />
Other key findings, takeaways, and analysis from the M&A
Leaders' Survey include the following:<br />
<h3>
Financial Acquirers Key to Overall Market Activity</h3>
Survey respondents expect that financial buyers – the
rivals to tech vendors for many targets – will play a major
role in overall market activity. That was true for this year (with
54 per cent forecasting an increase in private equity activity
compared with 2016) and even more so when the timeline was extended
out to 2020 (with 59 per cent anticipating an increase in PE
activity compared with 2016).<br />
PE firms are expected to focus on a mix of old and new M&A
strategies, according to the survey. Respondents predicted that
"bolt-on acquisitions" would see the largest increase in
activity from buyout shops through 2020, which is unsurprising
given that buyout shops typically acquire two or three times as
many bolt-ons as platforms in any given year, and they usually
involve smaller, less-risky transactions. However, the survey
respondents' second-ranked strategy of recapitalising venture
capital-backed startups comes as a relatively novel driver of PE
activity. Up until now, there have not been many of those types of
transactions, but as companies inside venture portfolios continue
to age beyond the 8- to 10-year holding period for most VC firms,
the startups may seek new backers. The demographics of the startup
ecosystem appear to support this trend.<br />
<h3>
Cross-Border M&A to See Change</h3>
Part of what will help M&A accelerate this year, at least in
the view of a plurality of survey respondents, is the new
administration in the United States. Four out of ten (41 per cent)
forecast that President Trump's future economic policies will
stimulate dealmaking, almost twice the 22 per cent who said his
policies will slow M&A.<br />
<img height="229" src="http://www.mondaq.com/images/article_images/629734b.jpg" width="413" /><br />
Conversely, M&A between the two largest economies in the
world, the United States and China, is expected to be particularly
difficult in the coming years.<br />
Two-thirds of survey respondents (65 per cent) predicted that
Chinese acquirers will slow their purchases of U.S. tech companies,
more than four times the 14 per cent that said the opposite.
Similarly, more than half (55 per cent) of the survey respondents
said U.S. companies will do fewer tech deals in China. That
sentiment is already coming through in the actual deal flow, where
Chinese acquirers of Chinese tech assets have outnumbered U.S.
buyers of Chinese tech assets three to one, according to 451
Research's M&A KnowledgeBase. Still, 49 per cent of survey
respondents expect an increase in acquisitions by Chinese companies
in countries other than the United States.<br />
Find out more about the survey results <a class="force" href="http://www.mondaq.com/redirection.asp?article_id=629734&company_id=1035&redirectaddress=https://www.mofo.com/special-content/spotlight-ma-and-leaders-survey/" target="_blank">
<strong>here</strong></a>.<br />
About the M&A Leaders Survey<br />
The survey – a partnership project between Morrison &
Foerster and tech market intelligence firm 451 Research now in its
11th edition – examines significant developments in deal
terms, as well as sentiments and trends in key technology markets
across the United States and the most active countries and regions
internationally. This survey was conducted in April 2017 and had
over 150 participants, primarily corporate or M&A executives
(44 per cent of respondents) and investment bankers (42 per cent of
respondents), with the remaining responses coming from lawyers,
VCs, PE professionals, and others in the M&A community. Roughly
9 out of 10 responses came from dealmakers and advisers based in
the United States; Silicon Valley represented the largest single
location, accounting for some 40 per cent of the total.<br />
<h3>
NOTEWORTHY DEALS</h3>
Below we highlight for you some of the noteworthy transactions
involving Europe that may provide you with valuable insights into
recent trends or developments.<br />
<h3>
HNA to assume control of storage business of Glencore UK</h3>
Chinese conglomerate HNA Group Co. Ltd. reached an agreement
with Glencore plc, a listed company on the London Stock Exchange,
to acquire 51 per cent of its petroleum products, as well as the
storage and logistics business of Glencore. With said acquisition,
HNA will assume control. The transaction, valued at USD 775
million, provides for the formation of a new company, HG Storage
International, in which the operation of oil storage assets in
Europe, Africa and the Americas will be combined. The deal is
expected to close in the second half of 2017.<br />
<h3>
Georgsmarienhütte Holding to separate from railway
business</h3>
Georgsmarienhütte Holding GmbH, a German-based group,
agreed to sell its railway system business, including the
subsidiaries in Bochum, Ilsenburg, and Brand-Erbisdorf, Germany, as
well as one subsidiary in Brazil, to a Chinese investor consortium
led by Full Hill Enterprises Ltd. The parties agreed not to
disclose any details of the transaction, which was closed in March
2017.<br />
A cross-office team of MoFo acted as lead counsel to the
purchaser, including attorneys from the Hong Kong and Berlin
offices.<br />
<h3>
Clariant to merge with U.S. competitor Huntsman</h3>
Clariant, a Swiss-based chemical company listed on the Swiss
Stock Exchange, reached an agreement with its U.S. competitor
Huntsman, a Texas-based NYSE-listed company, for a merger of
equals, creating a leading global specialty chemical company. The
merged company, with the new name "HuntsmanClariant", is
considered to have sales of approximately USD 13.2 billion and an
EBITDA of approximately USD 2.3 billion. The merged company will
have its legal seat in Switzerland but will be managed from The
Woodlands, Texas. The transaction provides for a 52 per cent stake
of the Clariant shareholders and a 48 per cent stake of the
Huntsman shareholders.<br />
<h3>
Merger of Deutsche Börse and London Stock Exchange blocked
by EU competition authority</h3>
Merger plans by Deutsche Börse AG and the London Stock
Exchange to create a unified major stock exchange operator in
Europe were finally blocked by the EU competition authority, the
Competition Directorate General of the European Commission. During
regulatory scrutiny, the authority required the LSE to divest its
holdings in MTS, an Italy-based electronic trading platform for
government bonds, making such divestment a condition for approval.
Due to the LSE's declaration of intent not to comply with such
requirement, the EU competition authority had to block the
transaction one day after Britain formally triggered Article 50
proceedings. The transaction attracted much attention, since both
parties had pledged to continue and had given assurance that they
would close the transaction despite the Brexit vote. The blocked
merger deal is the third failed attempt at a merger between the two
companies.<br />
<h3>
GE to invest in 3D printing company</h3>
NYSE-listed company General Electric acquired Concept Laser, a
leading provider of machine and plant technology for 3D printing of
metal components based in Lichtenfels, Germany. With the
acquisition of Swedish Arcam, GE becomes the world's market
leader in industrial 3D metal printing. GE plans to invest
approximately EUR 100 million in the site in Lichtenfels, and there
are also rumors that GE might locate the worldwide seat of its
newly formed division GE Additive in Lichtenfels. Sales of Concept
Laser most recently amounted to up to 400 units with a return of
approximately EUR 91 million.<br />
<h3>
Japanese Nidec acquires manufacturer of special compressor for
refrigerating and freezing appliances</h3>
Nidec Corporation, a Kyoto-based corporation listed on the
Nikkei, reached an agreement with Aurelius Equity Opportunities, a
capital investment company based in Germany, for the sale of the
SECOP Group, a leading manufacturer of compressors in refrigerating
and freezing appliances. The deal has a volume of EUR 185 million,
making it the largest company sale in the seller's history,
earning approximately 11 times its invested capital after seven
years. The sale will have a positive effect on Aurelius' group
profit of approximately EUR 100 million, according to a company
press release. The transaction is pending regulatory approval and
closing is expected in the coming months.<br />
<h3>
Chinese investment group to invest in German biotech
company</h3>
Chinese investment group Creat reached an agreement for the
takeover of Biotest, a Frankfurt Stock Exchange-listed biotech
company operating in the field of plasma protein products. The
major shareholder of Biotest, the founding family of Schleussner,
agreed to sell its 51 per cent stake in Biotest. Including debts,
accruals, and cash balance, Creat agreed to pay approximately EUR
1.3 billion. The deal provides for a payment of EUR 28.50 per
ordinary share and EUR 19 per preferred share. The takeover of
Biotest follows the purchase of UK-based Bio Products last year
with a volume of GBP 820 million.<br />
<h3>
Bosch to sell its starter motor business to Chinese investor
consortium</h3>
German automotive supplier Bosch entered into an agreement for
the sale of its starter motor division that includes 16 sites in 14
countries. The purchaser is Zhengzhou Coal Mining Machinery Group,
a manufacturer of machines used in coal mining and of automotive
parts, and China Renaissance Capital investment, a Hong Kong-based
private equity company managing a fund worth up to USD 2 billion.
All parties agreed to non-disclosure of any details of the
transaction, but the deal is considered to involve a cash payment
of EUR 545 million. The transaction is still pending regulatory
approval.<br />
<h3>
Cathay Fortune to acquire medical engineering specialist
Epigenomics</h3>
Hong Kong-based investment company Cathay Fortune offered
shareholders of Epigenomics, a medical engineering specialist
company based in Frankfurt, EUR 7.52 per share in cash, totaling
EUR 171 million.<br />
The offer price exceeds by almost 50 per cent the average share
price of the last three months. Founded in 1998 and listed in the
Prime Standard of the Frankfurt Stock Exchange, Epigenomics
specialises in molecular diagnostics and develops blood tests for
colorectal cancer pre-diagnostics. Cathay Fortune uses an
acquisition vehicle with the name Summit Hero in which the major
shareholder of Epigenomics, the Chinese diagnostics company
Biochain, also holds a stake via an exchange of its stakes in
Epigenomics. The takeover offer is currently under scrutiny by the
German securities exchange authority, BaFin.<br />
<h3>
Chinese automotive supplier to acquire a stake in Grammer</h3>
Chinese automotive supplier Ningbo Jifeng acquired convertible
bonds in Grammer, a manufacturer of headrests, armrests, and car
seats based in Amberg, Germany, worth up to EUR 60 million,
pursuant to which Jifeng is entitled to approximately 9.2 per cent
of the shares in Grammer. With said stakeholding, Jifeng seeks
strategic alliances with Grammer. The acquisition is an important
step in fending off a feared cold takeover: Grammer faces pressure
from Prevent Group, owned by the Bosnian investor family Hastor,
who seeks to replace the management of Grammer with managers of the
group, alleging misconduct and statutory violations by the current
management.<br />
Prevent Group attracted attention last year after a dispute with
Volkswagen, which led to a temporary breakdown of production in
Wolfsburg.Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-46510332790121859572017-02-13T07:10:00.001-08:002017-02-13T07:10:41.178-08:00 The State of Venture Capital in 2017 <h1 id="articleTitle">
<br /></h1>
<div class="Contributor">
<a href="http://www.lexology.com/contributors/2237/">
McCarter & English LLP
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<span class="article-jurisdictions">USA</span>
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February 2 2017
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After three years of strong growth, venture capital financing
activity slowed noticeably in 2016. According to data published by
Pitchbook and the National Venture Capital Association, companies raised
$69.1 Billion in 2016 from angels and institutional investors in 8,136
deals. While these numbers beat the industry average for the past 10
years, they are well below the lofty heights reached in 2015, when
companies raised $79.3 Billion in 10,468 deals. The decline in
dealmaking cut across all stages and nearly all industry sectors, but it
was particularly acute for early-stage startups. The number of
companies receiving their first VC equity investment (typically a
“Series A” financing) in FY 2016 was down nearly 30% from 2015, and has
now fallen for six consecutive quarters. The amount raised in those
transactions fell to its lowest level since 2013.<br />
<br />
Although the overall numbers indicate that investors are pulling
back, the devil is in the details, and the details suggest there are
reasons to be optimistic. For one thing, 2014 and 2015 saw record levels
of financing activity, and 2016 was still well above the historical
average, to say nothing of the doldrums of 2009. When put in context,
2016 was a strong year. Also, while the number of companies raising
capital and the number of overall deals fell across all industry
categories in 2016 relative to 2015, the pullback was much more
pronounced for the Media, Consumer Goods and Commercial Services
sectors, while companies in the Software and IT Hardware sectors
actually saw a slight uptick in the amount of capital raised. This
suggests that some of the pullback is a result of investors being more
disciplined and selective. Finally, VC funds raised more than $40
Billion in 2016, an increase of nearly 20% over 2015 and the most by far
in the past 10 years. Raising a new fund takes a significant amount of
time and energy, so it’s not surprising that a strong year for funds
would coincide with a decline in financing activity. More importantly,
VCs will be looking for ways to put all that new dry powder to work in
2017. All this suggests it’s too soon to say whether investors are
closing their wallets or merely catching their breath after a flurry of
investment activity over the past few years.<br />
<br />
While the headline numbers in 2016 are eye-catching, arguably the
most interesting development in the financing of startup companies in
2016 was the start of securities-based crowdfunding in the U.S. Since
the SEC’s “Regulation Crowdfunding” took effect on May 16, 2016,
startups have had the ability to raise capital by selling securities to
nearly anyone, and the early results are promising. According to filings
made with the SEC, as of December 31, 2016, 179 companies had filed to
raise capital under Regulation Crowdfunding, and 34 of them had
completed offerings in which they raised, in the aggregate,
approximately $10 million. While $10 million is a drop in the ocean of
startup financing, as the industry works out the kinks, crowdfunding
will become an increasingly popular means of raising seed capital. As
this happens, we will be watching carefully to see how much crowdfunding
increases overall funding for startups, as opposed to supplanting
angels and other seed-stage investors.<br />
</div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-19965673540403489662017-02-06T11:05:00.000-08:002017-02-06T11:05:09.102-08:00 Mergers and Acquisitions: 2016 Update <br /><div class="Contributor">
<a href="http://www.lexology.com/contributors/1743/">
Skadden Arps Slate Meagher & Flom LLP
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January 28 2017
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Global mergers and acquisitions volume in 2016 declined from the
record levels set in 2015, but activity was nonetheless strong by
historical standards. Value of global deals was approximately $3.7
trillion, an annual total behind only 2015 and 2007, according to
Thomson Reuters. The value of U.S. transactions was approximately $1.7
trillion. Despite unexpected political and economic developments,
M&A activity in 2016 reflected many of the trends of 2015.<br />
<strong>Market Drivers</strong><br />
Mergers and acquisitions volume in 2016 again was dominated by
strategic activity driven by fundamental forces — the need to grow
revenues and earnings in a low-growth environment and to be
competitively positioned in the global marketplace. Given these
conditions, M&A has provided corporations a means to grow revenues
faster than would be possible organically, and synergies resulting from
transactions have provided opportunities to expand margins and drive
more rapid earnings growth. Deal activity also has allowed strategic
players to enhance geographic or portfolio footprints, or to position
themselves as industry disruptors through the acquisition of new
technologies.<br />
These fundamental imperatives driving corporations’ rationale for
pursuing mergers and acquisitions were coupled with a continued benign
environment conducive to M&A, particularly in the United States.
Favorable factors included stable equity markets, strong corporate
balance sheets and the availability of acquisition financing at
historically attractive rates. Importantly, C-suite and boardroom
confidence about long-term opportunities continued, supporting deal
initiatives. Additionally, shareholder support for deals in 2015, while
not universal, in large part continued in 2016.<br />
One noteworthy development was an increase in inbound U.S. M&A
activity to record levels. The United States consistently has been an
attractive destination for M&A due to factors including large market
size, a growing (albeit slow-growth) economy, relatively stable capital
markets and the rule of law. With actual or potential economic
dislocations and political uncertainties threatening many of the world’s
markets, it is no surprise that the U.S. continued to attract foreign
investment in 2016. Inbound deal volume surpassed $500 billion, with
significant transactional activity coming from Canada, China and the
United Kingdom. Notably, Chinese outbound activity was at record levels —
$221 billion, according to Thomson Reuters. While robust asset prices, a
strong dollar, the potential impact of changes in Chinese policies
affecting outbound transactions from China and concerns regarding the
potential for growing economic nationalism may act as headwinds
tempering this trend, significant cross-border deal flows into the U.S.
appear likely to continue. (See “<a class="logclick ct_cont" href="https://www.skadden.com/insights/regional-focus-asia" target="_blank">Regional Focus: Asia</a>.”)<br />
<strong>Unsolicited Activity</strong><br />
Hostile and unsolicited mergers and acquisitions continued to play a
small but important role in the M&A market. In 2016, unsolicited
transactions accounted for nearly $400 billion in global deal value.<br />
The varied fates of unsolicited proposals in 2016 again demonstrated
the uncertainty of outcomes in hostile activity. As in prior years,
while hostile offerors in some situations successfully consummated
transactions, success was by no means universal. In other cases, targets
of unsolicited proposals ultimately were sold, but to a party other
than the original offeror. As in 2015, there also were several examples
of target companies successfully defending against unsolicited proposals
without an alternative transaction. One notable example was the
withdrawal by Canadian Pacific Railway of its unsolicited offer for
Norfolk Southern Corp. after Norfolk Southern determined that the value
generated under its own strategic plan was superior to that in Canadian
Pacific’s offer and that the proposed transaction was highly unlikely to
receive regulatory approval.<br />
For a corporation driven by the fundamental imperatives discussed
above, a hostile offer is sometimes the only path to pursue a
strategically critical transaction. While commencing a hostile public
offer is generally not a would-be acquirer’s preference given the cost
and uncertainty of the outcome, the elimination of most target takeover
defenses as a result of ongoing campaigns to implement governance “best
practices” and the evolution of many companies’ shareholder bases make
unsolicited activity an alternative in appropriate situations.<br />
<strong>Abandoned Transactions</strong><br />
A number of large proposed transactions were withdrawn in 2016 after
announcement, with estimates indicating that these abandoned deals
represented over $800 billion globally, almost one-fifth the dollar
value of transactions announced during that period of time. This
statistic reflects transactions abandoned for a number of reasons, and
at various stages, such as announced unsolicited offers that never
progressed and deals that were signed but ultimately terminated as a
result of shareholder dissatisfaction, emergence of a topping bid or
regulatory issues.<br />
Several large pharmaceuticals transactions were terminated following
administration changes to tax regulations to halt so-called “inversion”
transactions in which a U.S. company would be acquired by a smaller
foreign company, effectively moving the home tax jurisdiction of the
publicly traded parent outside the United States. A continuation of the
trend of aggressive antitrust enforcement at the Department of Justice
and the Federal Trade Commission — reflecting increased willingness on
the part of the government to litigate rather than accept proposed
settlements in transactions that raise substantive antitrust issues —
led to several large transactions being abandoned. It is unclear how
regulatory policy may change under a new administration in the U.S. and
how that will impact deals this year. (See <a class="logclick ct_cont" href="https://www.skadden.com/insights/antitrust-enforcement-trump-administration" target="_blank">“Antitrust Enforcement in the Trump Administration</a>.”)<br />
<strong>Impact of Activism on M&A Activity</strong><br />
Despite some signs that hedge fund activism may have hit its
high-water mark, including commentary from passive investors and other
long-term institutional holders seeking to encourage long-term
decision-making by corporate management, shareholder activists have
continued to have a meaningful impact in the M&A market. (See "<a class="logclick ct_cont" href="https://www.skadden.com/insights/directors-must-navigate-challenges-shareholder-centric-paradigm" target="_blank">Directors Must Navigate Challenges of Shareholder-Centric Paradigm</a>.")<br />
In an environment supportive of mergers and acquisitions activity,
and with both strategic and private equity buyers seeking targets, “sell
the company” or “sell a business” platforms can be attractive to
activist investors and other active managers looking for short-term
returns. Activist campaigns have preceded sales at a number of companies
this year. In other cases, activists have sought to block or
renegotiate transactions. Appraisal litigation is another area where
hedge funds have sought to use M&A transactions to harvest
additional returns. (See “<a class="logclick ct_cont" href="https://www.skadden.com/insights/key-developments-delaware-corporation-law-2016" target="_blank">Key Developments of Delaware Corporation Law in 2016</a>.”)<br />
Activism is not going away, and market participants accordingly need
to continue to factor in the potential for activist intervention and how
best to respond.<br />
<strong>Potential Impact of Administration Change on US M&A Activity</strong><br />
Equity markets to date have reacted favorably to the outcome of the
presidential election and the resultant prospect of changes to fiscal
and regulatory policies. The makeup of the Trump administration
continues to take shape, and perspectives on likely administration
policies continue to develop, making speculation regarding the new
administration's impact on M&A activity just that —speculation. In
the shorter term, uncertainty as to policy could impact the pace of deal
activity. However, signals as to potential policy direction indicate
areas of likely change that could result in meaningful, and generally
favorable, impact on the M&A environment, such as adoption of a more
business-friendly approach to regulation, increased competitiveness of
the <a class="logclick ct_cont" href="https://www.skadden.com/insights/business-tax-reform-all-certain-us-europe" target="_blank">U.S. corporate tax regime</a> and adoption of incentives to repatriate corporate cash held offshore. The impact of possible changes to fiscal policy,<a class="logclick ct_cont" href="https://www.skadden.com/insights/significant-changes-likely-us-trade-policy-and-enforcement" target="_blank"> trade policy </a>and <a class="logclick ct_cont" href="https://www.skadden.com/insights/cfius-and-foreign-investment-reviews-2017-and-beyond" target="_blank">national security review </a>are more difficult to predict and could lead to positive or negative impacts on the deal environment.<br />
Given the significance of some potential changes and the active
dialogue of the administration with the corporate community, boards and
executives considering extraordinary transactions should carefully
consider the possible impact of administration policy.<br />
<br />
</div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-54803222226085615082016-12-06T13:25:00.002-08:002017-02-06T11:03:59.586-08:00How Do Venture Capitalists Make Decisions? <br /><br />
In <a href="http://www.nber.org/papers/22587">How Do Venture Capitalists Make Decisions? (NBER Working Paper No. 22587)</a>, Paul Gompers, William Gornall, Steven N. Kaplan, and Ilya A. Strebulaev report on the results of a survey of 885 institutional venture capitalists (VCs) conducted between November 2015 and March 2016. The survey asked detailed questions covering business practices. Most respondents were graduates of top MBA programs or Kauffman Fellows. Some were recruited from a list of individual members of the National Venture Capital Association and the VentureSource database. Eighty-two percent of respondents were partners in their firms.<br />
<br />
The researchers found that deal flow, deal selection, and VC value-add are all important contributors to value creation. Among these, deal selection was considered the most important. VCs view the quality of the management team as more important than the business model, product, or market, both in selecting deals and in deal success. Managerial ability, industry experience, and passion were prized qualities for management team selection.<br />
<br />
Respondents indicated that their firms discovered or sourced deals primarily through their networks. Over 30 percent of deals were generated through "professional networks," 30 percent were "proactively self-generated," 20 percent were referred by other investors, 8 percent came from a portfolio company. Only 10 percent came inbound from company management teams. The median firm considered 100 deals in a year for every deal it closed or invested in. Firms specializing in information technology considered 151 deals for each investment made; those specializing in health care considered only 78. Deals for early startups that generated an offer were more likely to close than those for later-stage companies with longer track records.<br />
<br />
More than 90 percent of respondents considered a company's management team an important factor in the success or failure of their investments. Over 55 percent of respondents considered the team the most important factor. After they invested, venture capital firms offered services such as strategic guidance (87 percent), connections to investors (72 percent), connections to customers (69 percent), operational guidance (65 percent), hiring board members (58 percent), and hiring employees (46 percent). Respondents reported little flexibility about a number of dimensions of corporate structure, including liquidation preferences, vesting rules, antidilution protection, and board control.<br />
<br />
—Linda GormanJonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-12078953261296792732016-11-18T08:29:00.003-08:002016-11-18T08:29:31.669-08:00M&A at a Glance (November 2016) Paul, Weiss, Rifkind, Wharton & Garrison LLP<br /><br />Canada, Netherlands, United Kingdom, USA November 15 2016<br />
<br />M&A volume in October 2016 increased to record levels, as measured by total dollar value, largely due to a spike in the number of megadeals, with eight October deals valued at or above $10 billion dollars. Total deal volume in the U.S. and globally rose in October 2016, by 163% to $341.10 billion and by 75.6% to $549.10 billion, respectively-the highest monthly deal volume totals since the inception of this publication in April 2012. Despite the increase in M&A volume, however, the number of deals continued to fall towards record-low territory, with U.S. deals falling by 8.5% to 668 and global deals by 10.4% to a twelve-month low of 2,567.<br />
<br />The surge in overall deal volume, as measured by dollar value, was driven primarily by strategic activity, although sponsor-related deal volume also rose. Strategic transactions accounted for a large portion of total deal volume, both in the U.S. and globally (91.2%, as compared to 79.1% over the last 12 months; and 87.3%, as compared to 81.3% over the last 12 months, respectively). Strategic deal volume increased in the U.S. by 176.8% to $311.31 billion and globally by 79.6% to $479.48 billion. The number of strategic deals declined in the U.S. by 10.2% to 536 and globally by 11.8% to 2,258. In sponsor-related activity, U.S. deal volume increased by 73% to $29.79 billion, and global deal volume increased by 52.2% to $69.62 billion. The number of sponsor-related deals in October 2016 remained near September levels, both in the U.S. and globally (132 and 309, respectively).<br />
<br />Crossborder activity followed a similar trend, with particularly strong results in the U.S. outbound market. Outbound U.S. deal volume increased by 208.7% to $61.31 billion, driven primarily by Qualcomm Incorporated's offer to acquire NXP Semiconductors N.V. for approximately $47.00 billion, and the number of deals increased by 10.9% to 112. Inbound U.S. deal volume increased by 44.4% to $98.53 billion, while the number of deals decreased by 16.2% to 114. Globally, crossborder deal volume rose by 52.2% to $205.95 billion and the number of deals decreased by 11.7% to 610, reaching a new 12-month low. Figure 1 and Annex Figures 5A-7A. The Netherlands claimed the lead for monthly outbound U.S activity by volume in October 2016 ($48.14 billion), while the U.K. maintained its 12-month lead ($72.22 billion). As for inbound activity, the U.K. overtook Canada as the leading country of origin in deal volume in October 2016 ($60.95 billion), while Canada maintained its 12-month lead ($120.01 billion).<br />
<br /><br />Leisure and Recreation was the most active target industry by deal volume in the U.S. in October 2016 ($108.75 billion), boosted by AT&T Inc.'s $83.07 billion offer to acquire Time Warner Inc. Consumer Products was the second-most active target industry, driven by British American Tobacco Plc's $46.55 billion offer to acquire Reynolds American Inc. The AT&T offer and the British American Tobacco offer are two of the largest U.S. public mergers announced over the last 12 months. Figure 5. Computers & Electronics remained the most active target industry by number of deals for the month (168) and maintained its position as the most active target industry for the last 12 months, as measured by both volume ($274.19 billion) and number of deals (2,482).<br />
<br /><br />With respect to U.S. public mergers, notwithstanding a spike in average deal value, both break and reverse break fees remained in line with historical levels.No transaction in October 2016 involving a strategic buyer had a go-shop provision.. In line with the rise of strategic transactions, the use of cash consideration in October 2016 was below its 12-month average (35.7%, as compared to 62.5%). Finally, the incidence of tender offers as a percentage of U.S. public mergers decreased to 7.1% (as compared to its 12-month average of 22.8%), again, possibly as a result of the prominence of strategic deals in October, which may not experience any timing or other advantages from using a two-step merger structure.<br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-24261202294824666912016-05-21T07:02:00.000-07:002016-05-21T07:02:29.358-07:00Berkery Noyes Software Industry M&A Report For First Quarter 2016 <span style="font-size: small;"><span style="font-family: inherit;">
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<span style="font-size: small;"><span style="font-family: inherit;"></span></span><span style="font-size: small;"><span style="font-family: inherit;"><span>Berkery Noyes has released its <a href="http://www.berkerynoyes.com/doc/SoftwareQ12016.aspx">Q1 2016 mergers and acquisitionstrend report for the Software Industry.</a> The report analyzes M&A activity in
the Software Industry during Q1 2016 and compares it with the past four
quarters.</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span> </span></span></span><span style="font-size: small;"><span style="font-family: inherit;">
</span></span><br />
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Transaction
volume experienced a seven percent gain over the past three months, with a
total of 523 deals in Q1 2016. Overall value fell 81 percent, from $111.5
billion to $21.6 billion. There were four transactions in Q4 2015 with a combined
value of approximately $86 billion. This included Dell’s announced acquisition
of EMC Corporation for $67.5 billion. If these four deals are excluded, value
decreased 15 percent from Q4 2015 to Q1 2016. Aggregate value also declined
nine percent on a year-over-year basis. The number of deals throughout the past
five quarters reached its peak in Q3 2015, whereas value reached its zenith in
Q4 2015.</span></span></span></div>
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<br /></div>
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</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Strategic
acquirers completed eight of the top ten highest value software deals in Q1
2016. The industry’s largest transaction year-to-date was Cisco Systems’
acquisition of Jasper Technologies, an Internet of Things (IoT) service
platform, for $1.4 billion. This followed Cisco’s IoT related acquisition of
ParStream in Q3 2015. The Jasper acquisition was one of the highest value IoT
deals ever completed in this nascent marketplace. In terms of active industry
acquirers, Cisco completed two other software transactions in Q1 2016 with the
announced acquisition of CliQr, a provider of application-defined cloud
management solutions, for $260 million; and Synata, an enterprise cloud search
engine.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Deal
volume in the “Niche Software” segment, which is targeted to specific vertical
markets, increased six percent in Q1 2016. Niche Software was the best
represented segment in the top ten list of highest value transactions with
eight deals. Three of these eight acquisitions occurred in the Healthcare
vertical.</span></span></span></div>
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<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Along
these lines were GI Partners’ announced acquisition of Netsmart Technologies, a
provider of electronic health records, patient management, billing and other
solutions for the health and human services sector, which is being acquired in
a joint venture with Allscripts, for $950 million; ResMed’s announced
acquisition of Brightree, a cloud-based software company that serves the
post-acute care sector, for $800 million; and Wipro’s announced acquisition of
HealthPlan Services, a technology and Business Process as a Service (BPaaS)
provider that serves the U.S. health insurance sector, for $460 million.</span></span></span></div>
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</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Consumer
Software M&A activity improved 22 percent in Q1 2016, the segment’s third
consecutive quarterly rise. The Business Software segment, which consists of
software designed for general business practices and not specific industry
markets, saw an 18 percent increase in volume throughout the past three months.</span></span></span></div>
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<br /></div>
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</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Deal
volume in the Infrastructure Software segment declined 21 percent in Q1 2016,
which marked a return to its Q3 2015 level. The largest Infrastructure
transaction during the quarter was Micro Focus’ announced acquisition of Serena
Software, which specializes in application lifecycle management (ALM) software,
for $540 million.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Other
high value Infrastructure deals were Microsoft Corporation’s announced
acquisition of Xamarin, which develops software solutions for mobile
application development, with a reported purchase price between $400 and $500
million; and Oracle’s announced acquisition of Ravello, a provider of
cloud-based virtualization software solutions, with a reported purchase price
between $400 and $450 million. As for the cyber-security sector, notable deals
included FireEye’s acquisitions of iSIGHT Partners for $200 million and Invotas
International Corporation; and IBM with the acquisition of Resilient Systems.</span></span></span></div>
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<h1>
<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Software Industry M&A Report For First Quarter 2016
</span></span></h1>
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<span style="font-size: small;"><span style="font-family: inherit;">
Monday, April 04, 2016</span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — April 4, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its Q1
2016 mergers and acquisitions trend report for the Software Industry.
The report analyzes M&A activity in the Software Industry during Q1
2016 and compares it with the past four quarters.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Transaction volume experienced a seven percent gain over the past three
months, with a total of 523 deals in Q1 2016. Overall value fell 81
percent, from $111.5 billion to $21.6 billion. There were four
transactions in Q4 2015 with a combined value of approximately $86
billion. This included Dell’s announced acquisition of EMC Corporation
for $67.5 billion. If these four deals are excluded, value decreased 15
percent from Q4 2015 to Q1 2016. Aggregate value also declined nine
percent on a year-over-year basis. The number of deals throughout the
past five quarters reached its peak in Q3 2015, whereas value reached
its zenith in Q4 2015.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Strategic acquirers completed eight of the top ten highest value
software deals in Q1 2016. The industry’s largest transaction
year-to-date was Cisco Systems’ acquisition of Jasper Technologies, an
Internet of Things (IoT) service platform, for $1.4 billion. This
followed Cisco’s IoT related acquisition of ParStream in Q3 2015. The
Jasper acquisition was one of the highest value IoT deals ever completed
in this nascent marketplace. In terms of active industry acquirers,
Cisco completed two other software transactions in Q1 2016 with the
announced acquisition of CliQr, a provider of application-defined cloud
management solutions, for $260 million; and Synata, an enterprise cloud
search engine.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Deal volume in the “Niche Software” segment, which is targeted to
specific vertical markets, increased six percent in Q1 2016. Niche
Software was the best represented segment in the top ten list of highest
value transactions with eight deals. Three of these eight acquisitions
occurred in the Healthcare vertical.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Along these lines were GI Partners’ announced acquisition of Netsmart
Technologies, a provider of electronic health records, patient
management, billing and other solutions for the health and human
services sector, which is being acquired in a joint venture with
Allscripts, for $950 million; ResMed’s announced acquisition of
Brightree, a cloud-based software company that serves the post-acute
care sector, for $800 million; and Wipro’s announced acquisition of
HealthPlan Services, a technology and Business Process as a Service
(BPaaS) provider that serves the U.S. health insurance sector, for $460
million.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Consumer Software M&A activity improved 22 percent in Q1 2016, the
segment’s third consecutive quarterly rise. The Business Software
segment, which consists of software designed for general business
practices and not specific industry markets, saw an 18 percent increase
in volume throughout the past three months.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Deal volume in the Infrastructure Software segment declined 21 percent
in Q1 2016, which marked a return to its Q3 2015 level. The largest
Infrastructure transaction during the quarter was Micro Focus’ announced
acquisition of Serena Software, which specializes in application
lifecycle management (ALM) software, for $540 million.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Other high value Infrastructure deals were Microsoft Corporation’s
announced acquisition of Xamarin, which develops software solutions for
mobile application development, with a reported purchase price between
$400 and $500 million; and Oracle’s announced acquisition of Ravello, a
provider of cloud-based virtualization software solutions, with a
reported purchase price between $400 and $450 million. As for the
cyber-security sector, notable deals included FireEye’s acquisitions of
iSIGHT Partners for $200 million and Invotas International Corporation;
and IBM with the acquisition of Resilient Systems.</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2016softwareQ1.aspx#sthash.WGLPIqiu.dpuf</span></span></div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com1tag:blogger.com,1999:blog-796146979950276147.post-75421892840995417002016-05-21T06:59:00.001-07:002016-05-21T06:59:27.216-07:00Berkery Noyes Software Industry M&A Report For Full Year 2015
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<span style="font-size: small;"><span style="font-family: inherit;"><b><span><br /></span></b></span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"></span></span><span style="font-size: small;"><span style="font-family: inherit;"><b><span> </span></b><span>Berkery Noyes has released <a href="http://www.berkerynoyes.com/doc/2015fy/trends/software.aspx">its full year 2015 mergers andacquisitions trend report for the Software Industry. </a>The report analyzes
M&A activity in the Software Industry during 2015 and compares it with data
covering 2013 and 2014.</span></span></span><div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Deal
volume experienced a nine percent year-to-year increase, with a total of 2,028
transactions in 2015. Overall value gained 72 percent, from $123.74 billion to
$213.20 billion. This rise was attributable in major part to Dell’s announced
acquisition of EMC Corporation for $67.48 billion, which was the highest value
deal ever recorded in the industry.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>The
EMC acquisition accounted for almost one-third of the industry’s aggregate
value in 2015. If excluded, total value gained 18 percent on a yearly basis.
With this transaction, Dell is looking to combine its server businesses with
EMC’s storage and virtualization assets, enabling it to better compete beyond
the PC market with a wider range of products. Also of note, Michael Dell and
Silver Lake Partners took Dell private in 2013 for $24 billion.</span></span></span></div>
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<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>In
terms of valuations, the median revenue multiple declined from 2.7x to 2.4x,
while the median EBITDA multiple improved from 12.0x to 13.8x. Deals in the
$10-$20 million range over the past three years received a median enterprise
value multiple of 2.3x revenue, whereas those above $160 million had a median
enterprise value multiple of 3.6x revenue.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Financial
sponsors were responsible for five of the industry’s top ten largest deals in
2015. Three of these five transactions occurred in the Infrastructure segment.
This consisted of The Carlyle Group’s announced acquisition of Veritas
Technologies Corporation, a storage and server management software solutions
business, for $8 billion; Permira and CPP Investment Board’s acquisition of
Informatica, a provider of enterprise data integration software and services,
for $4.77 billion; and Thoma Bravo and Silver Lake Partners’ announced
acquisition of SolarWinds, an IT management software and monitoring company,
for $4.38 billion.</span></span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>As
for volume in the Infrastructure Software segment, deal activity improved 19
percent over the past year. Upon examination of the information security
subsector, Blue Coat Systems was a notable acquirer in 2015 with Elastica, a
cloud security startup, for $280 million; and Perspecsys, a cloud data protection
platform. This followed Bain Capital’s acquisition of Blue Coat earlier in the
year for $2.4 billion. With these acquisitions, Blue Coat is positioning itself
as a leader in the cloud access security broker (CASB) space. Regarding high
profile strategic Infrastructure deals, EMC acquired Virtustream, which offers
cloud computing management software, for $1.2 billion prior to the Dell
acquisition.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>The
Consumer Software segment underwent a 27 percent decrease in volume. This
followed a 14 percent rise between 2013 and 2014. The largest Consumer deal
during 2015 was the announced acquisition of Qihoo 360 Technology, an internet
security company based in China, which was taken private by an investor
consortium for $8.28 billion.</span></span></span></div>
<div class="MsoNormal">
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Transaction
activity in the “Niche Software” segment, which is targeted to specific
vertical markets, saw a 17 percent gain. Three of the industry’s top ten deals
occurred in the Niche segment, including two related to the automobile market.
Accordingly Vista Equity Partners acquired Solera Holdings, which provides risk
management software to the automotive and property marketplace, for $6.25
billion; and Cox Automotive acquired Dealertrack Technologies, a web-based
software solutions and services company for automotive retailers, for $4.36
billion.</span></span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Meanwhile,
the number of deals in the Business Software segment, which consists of
software designed for general business practices and not specific industry
markets, increased 12 percent. The most active acquirer in the Business segment
in 2015 was Microsoft with seven transactions.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>“With
the increased adoption of cloud and SaaS environments even software companies
are recognizing the innate ability to integrate rather than develop
everything," said James Berkery, Chief Information Officer at Berkery
Noyes. "It stands to reason as more software solutions appear on the web
that the proliferation of the API has begun to create an integration market
unto itself. A sort of API marketplace with brokered solutions, tech enabled
services and niche applications is poised to capitalize."</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span>Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-246485593901078372016-05-19T12:14:00.002-07:002016-05-19T12:14:37.406-07:00Berkery Noyes Media and Marketing Industry M&A Report For Full Year 2015
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--></style><span style="font-size: small;"><span style="font-family: inherit;"><span> </span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span>Berkery Noyes has released its <a href="http://www.berkerynoyes.com/doc/2015FY/Media.aspx">full year 2015 mergers andacquisitions trend report for the Media and Marketing Industry</a>. The report
analyzes M&A activity in the Media and Marketing Industry during 2015 and
compares it with data covering 2013 and 2014.</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span> </span>
</span></span><br />
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>The
firm’s research shows 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. Deals in the $10-$20 million range over the last three years received a
median enterprise value multiple of 1.5x revenue, whereas those above $160
million had a median enterprise value multiple of 2.8x revenue. The number of
private equity backed transactions increased 13 percent during the past year,
from 207 to 233.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>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.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>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. High profile segment
transactions in 2015 included Dalian Wanda Group’s announced acquisition of
Infront Sports & Media AG, an international sports marketing company that
offers an array of services such as media rights distribution, brand
development, and event sponsorship, for $1.2 billion; comScore’s announced
acquisition of Rentrak Corporation, a cross-platform media measurement firm,
for $827 million; and GTCR and Adams Outdoor Advertising’s announced
acquisition of Fairway Outdoor Advertising, which operates about 20,000
bulletins, posters and digital billboards, for $575 million.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>As
for other areas covered in the report, 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.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>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.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>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. Other notable segment deals included Verisk Analytics’ acquisition of
Wood Mackenzie, a data analytics and research firm focused on the oil, gas and
mining market, for $2.79 billion; McGraw Hill Financial’s acquisition of SNL
Financial, a news, data, and analysis provider, for $2.23 billion; and
Equifax’s announced acquisition of Veda, a consumer and commercial credit
reporting company, for $1.86 billion.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>In
terms of the Consumer Publishing segment, volume declined five percent in 2015.
The largest Consumer Publishing transaction during the year was Japanese media
group Nikkei’s announced acquisition of The Financial Times from Pearson for
$1.3 billion. Previously mentioned Alibaba also completed a deal in the segment
with the acquisition of South China Morning Post, an English language daily
newspaper in Hong Kong. Jack Ma of Alibaba is now one of several Internet and
tech leaders who have made notable recent investments in the Consumer
Publishing space, following others such as Amazon’s Jeff Bezos with the
acquisition of The Washington Post for $250 million in 2013. </span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Meanwhile, the
most active Consumer Publishing acquirer in 2015 was Adams Publishing Group.
The family-owned media company, which owns community newspapers, specialty
magazines, radio stations, and other products in its portfolio, completed five
deals.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>“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.”</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Media and Marketing Industry M&A Report For Full Year 2015
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Wednesday, January 06, 2016</span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — January 6, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its
full year 2015 mergers and acquisitions trend report for the Media and
Marketing Industry. The report analyzes M&A activity in the Media
and Marketing Industry during 2015 and compares it with data covering
2013 and 2014.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The firm’s research shows 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. Deals in the $10-$20 million
range over the last three years received a median enterprise value
multiple of 1.5x revenue, whereas those above $160 million had a median
enterprise value multiple of 2.8x revenue. The number of private equity
backed transactions increased 13 percent during the past year, from 207
to 233.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
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.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
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. High profile segment transactions in 2015 included Dalian Wanda
Group’s announced acquisition of Infront Sports & Media AG, an
international sports marketing company that offers an array of services
such as media rights distribution, brand development, and event
sponsorship, for $1.2 billion; comScore’s announced acquisition of
Rentrak Corporation, a cross-platform media measurement firm, for $827
million; and GTCR and Adams Outdoor Advertising’s announced acquisition
of Fairway Outdoor Advertising, which operates about 20,000 bulletins,
posters and digital billboards, for $575 million.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
As for other areas covered in the report, 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.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
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.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
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. Other notable
segment deals included Verisk Analytics’ acquisition of Wood Mackenzie, a
data analytics and research firm focused on the oil, gas and mining
market, for $2.79 billion; McGraw Hill Financial’s acquisition of SNL
Financial, a news, data, and analysis provider, for $2.23 billion; and
Equifax’s announced acquisition of Veda, a consumer and commercial
credit reporting company, for $1.86 billion.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
In terms of the Consumer Publishing segment, volume declined five
percent in 2015. The largest Consumer Publishing transaction during the
year was Japanese media group Nikkei’s announced acquisition of The
Financial Times from Pearson for $1.3 billion. Previously mentioned
Alibaba also completed a deal in the segment with the acquisition of
South China Morning Post, an English language daily newspaper in Hong
Kong. Jack Ma of Alibaba is now one of several Internet and tech leaders
who have made notable recent investments in the Consumer Publishing
space, following others such as Amazon’s Jeff Bezos with the acquisition
of The Washington Post for $250 million in 2013. Meanwhile, the most
active Consumer Publishing acquirer in 2015 was Adams Publishing Group.
The family-owned media company, which owns community newspapers,
specialty magazines, radio stations, and other products in its
portfolio, completed five deals.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
“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.”</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2015FY/Media.aspx#sthash.L9AXv7wL.dpuf</span></span></div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-34137858323544206712016-05-19T08:04:00.003-07:002016-05-19T08:04:57.446-07:00Berkery Noyes Releases Healthcare/Pharma Information and Technology Industry M&A Report For Full Year 2015
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<span style="font-size: small;"><span style="font-family: inherit;"><b><span></span></b><span>Berkery Noyes, an independent
mid-market investment bank, has released its <a href="http://www.berkerynoyes.com/doc/2015FY/healthcare.aspx">full year 2015 mergers and
acquisitions trend report for the Healthcare/Pharma Information and Technology
Industry.</a></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>The
report analyzes merger and acquisition activity for the industry during 2015
and compares it with data covering 2013 and 2014. This market includes
information, technology, and digital companies servicing the pharmaceutical,
healthcare payer, and healthcare provider spaces.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Total
transaction volume increased 15 percent on a year-to-year basis. Aggregate
value gained four percent, from $16.44 billion to $17.08<b> </b>billion.
Regarding valuations, the median revenue multiple improved from 2.4x to 2.7x,
while the median EBITDA multiple remained nearly constant at 13.8x. As for
strategic acquirers, the number of deals rose 24 percent, from 281 to 348.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>The
most active acquirer in 2015, either directly or through an affiliated
business, was eHealth company CompuGroup Medical AG with seven deals.
Meanwhile, the most active strategic U.S. based acquirer in 2015 was Roper
Technologies with five transactions. Of Roper’s deals, the largest was the
announced acquisition of CliniSys Group, a supplier of laboratory information
management systems, through Sunquest Information Systems for $261 million.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>The
industry’s most acquisitive financial sponsor in 2015 was New Mountain Capital
with five deals. In terms of value, two of the top ten largest transactions
during the year were backed by private equity firms. This included Pamplona
Capital Management’s announced acquisition of MedAssets, a healthcare
performance improvement company, for $2.77 billion, which was also the
industry’s highest value deal in 2015. Pamplona is combining MedAssets’ revenue
cycle management (RCM) business with Precyse, a health information management
company that it acquired earlier in the year. In addition, Pamplona is
divesting MedAssets’ spend and clinical resource management business to VHA-UHC
Alliance NewCo. VHA, a national healthcare network, and UHC, an alliance of
not-for-profit academic medical centers, were combined in 2015 following a
merger.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>The
other financially sponsored deal that made the top ten list was Emdeon’s
acquisition of Altegra Health, which offers technology-enabled payment
solutions for health plans and healthcare providers, for $910 million. Emdeon
is a portfolio company of Blackstone and Hellman & Friedman.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Deal
volume in the Healthcare IT segment improved 21 percent in 2015. The Healthcare
IT segment accounted for almost half of the industry’s aggregate volume, and
strategic acquirers comprised 82 percent of the Healthcare IT volume.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Notable
Healthcare IT transactions in the top ten list included IBM Watson Health’s
acquisition of Merge Healthcare Incorporated, a provider of medical image
handling and processing, interoperability and clinical systems, for $1.03
billion; and Cardinal Health’s acquisition of Navihealth, a post-acute care
software company that helps physicians manage bundled payments, for $290
million.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Other
high profile Healthcare IT deals outside the top ten were Computer Programs and
Systems’ acquisition of Healthland, a provider of integrated technology
solutions to rural community and critical access hospitals, for $250 million;
Quality Systems’ acquisition of HealthFusion, a developer of web-based, cloud
computing software for physicians, hospitals and medical billing services, for
$165 million; and Roper Industries’ acquisition of Strata Decision Technology,
a cloud-based financial analytics and performance platform that is used by
healthcare providers, for $140 million.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Upon
examination of other markets covered in the report, the segment with the
largest yearly rise in volume was Medical Education, which more than doubled
from 18 to 39 transactions. The Healthcare Business Services segment
experienced a 19 percent increase, from 81 to 96 deals. M&A activity in the
combined Pharma segments declined 17 percent, from 52 to 43 acquisitions.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>“For
all the recent talk of increased deal flow, there still remains a lack of
high-quality opportunities of scale in the market today,” said Tom O’Connor,
Managing Director at Berkery Noyes. “However, once an attractive opportunity of
scale comes out there is no lack of buyers at robust prices. The credit
environment is still favorable for attractive deals of scale, particularly
those where a high percentage of revenue is recurring.” O’Connor added,
“Companies of scale with rapid revenue growth are perfect bolt-ons for
strategic buyers, and many of the large private equity groups have come down
market looking for new platforms to buy and build.”</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>According
to Jonathan Krieger, Managing Director at Berkery Noyes, "Strategics
continue to acquire businesses to build out their product portfolio and broaden
their customer footprint. Healthcare constituents continue to seek niche
software vendors that promote interoperability, structure clinical data,
improve outcomes and reduce costs."</span></span></span></div>
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Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-40690755690637126342016-05-19T08:00:00.002-07:002016-05-19T08:00:58.182-07:00Berkery Noyes Releases Information Industry M&A Report For Full Year 2015 <span style="font-size: small;"><span style="font-family: inherit;">
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<span style="font-size: small;"><span style="font-family: inherit;"><b><span><br /></span></b></span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"></span></span><span style="font-size: small;"><span style="font-family: inherit;"><b><span> </span></b><span>Berkery Noyes, an independent
mid-market investment bank, has released its <a href="http://www.berkerynoyes.com/doc/2015FY/info.aspx">full year 2015 mergers andacquisitions trend report for the Information Industry</a>.</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span> </span></span></span><span style="font-size: small;"><span style="font-family: inherit;">
</span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span>The
Information report features companies in the Media & Marketing, Software,
and Online & Mobile Industries. It analyzes M&A activity during 2015
and compares it with data covering 2013 and 2014.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>According
to Berkery Noyes’ latest research there was a nine percent increase in deal
volume. Total value in the Information Industry gained 49 percent on a
year-to-year basis, from $230.81 billion to $342.78 billion. This rise in value
was attributable in large part to Dell’s announced acquisition of EMC
Corporation for $67.48 billion, which was the highest value deal ever recorded
in the industry. The EMC deal accounted for about one-fifth percent of the
Information Industry’s aggregate value during the year. Without this
transaction, overall value rose 19 percent.</span></span></span></div>
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<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>The
industry’s median revenue multiple declined from 2.3x in 2014 to 2.1x in 2015,
while the median EBITDA multiple decreased from 11.5x to 10.7x. Deals in the
$10-$20 million range over the past three years received a median enterprise
value multiple of 2.1x revenue, whereas those above $160 million had a median
enterprise value multiple of 3.3x revenue.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>One
notable trend in 2015 was non-tech companies looking to acquire information and
tech businesses. Examples with deal values above $1 billion were car
manufacturers BMW Group, Audi Group, and Mercedes-Benz with the acquisition of
HERE, a digital mapping and location intelligence business, for $3.1 billion;
and defense contractor Raytheon with the acquisition of Websense, a
cyber-security firm, for $1.9 billion.</span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span>Meanwhile,
transactions highlighting this trend with deal values below $1 billion included
audio and infotainment manufacturer Harmon International, which serves several
markets such as the automotive sector, with the acquisition of Symphony Teleca,
a software engineering and integration service, for $548 million and Red Bend
Software, a provider of software management for connected devices, for $170
million; and aircraft manufacturer Boeing with the acquisition of Peters
Software, a provider of aviation training content for commercial and private
pilots, as well as 2d3 Sensing, an imagery software company that processes
critical intelligence and surveillance data.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>Regarding
the three horizontal markets in the report, volume in the Media & Marketing
portion of the Information Industry improved eight percent over the past year.
Transaction value in the horizontal’s B2B Publishing and Information segment
more than doubled, from $9.38 billion to $23.01 billion. B2B was also the best
represented Media segment with five of the top ten highest value deals in the
horizontal.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>As
for the Software horizontal, deal activity rose nine percent in 2015. This
included a 19 percent gain in the Infrastructure segment. In terms of specific
buyers, the most active Infrastructure acquirer during the year was IBM with
six transactions. This consisted of Gravitant, a developer of hybrid cloud brokerage
software; CleverSafe, a data storage technology company; StrongLoop, a software
provider that enables developers to build APIs that connect applications and
devices; Appcore, a cloud automation management platform; Blue Box Group, a
managed private cloud provider built on OpenStack; and AlchemyAPI, a cognitive
computing company that will integrate with IBM’s Watson platform.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span>The
Online & Mobile horizontal market saw volume increase 12 percent between
2014 and 2015. The number of deals in the E-Commerce segment gained 16 percent.
In terms 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. This consisted of HomeAway, an online marketplace for the vacation
rental industry, for $3.24 billion; as well as Orbitz Worldwide for $1.42
billion and Travelocity.com for $280 million.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: small;"><span style="font-family: inherit;">
</span></span><div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
<h1>
<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Information Industry M&A Report For Full Year 2015
</span></span></h1>
<div id="ctl00_ctl00_bodyContent_BodyContent_PublicationDate">
<div class="date">
<span style="font-size: small;"><span style="font-family: inherit;">
Wednesday, January 13, 2016</span></span></div>
</div>
<div class="module-position mctop">
<div id="ctl00_ctl00_bodyContent_BodyContent_mpMainContentTop_pnlModules">
</div>
</div>
<div id="content-main">
<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — January 13, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its
full year 2015 mergers and acquisitions trend report for the Information
Industry.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Information report features companies in the Media & Marketing,
Software, and Online & Mobile Industries. It analyzes M&A
activity during 2015 and compares it with data covering 2013 and 2014.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
According to Berkery Noyes’ latest research there was a nine percent
increase in deal volume. Total value in the Information Industry gained
49 percent on a year-to-year basis, from $230.81 billion to $342.78
billion. This rise in value was attributable in large part to Dell’s
announced acquisition of EMC Corporation for $67.48 billion, which was
the highest value deal ever recorded in the industry. The EMC deal
accounted for about one-fifth percent of the Information Industry’s
aggregate value during the year. Without this transaction, overall value
rose 19 percent.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The industry’s median revenue multiple declined from 2.3x in 2014 to
2.1x in 2015, while the median EBITDA multiple decreased from 11.5x to
10.7x. Deals in the $10-$20 million range over the past three years
received a median enterprise value multiple of 2.1x revenue, whereas
those above $160 million had a median enterprise value multiple of 3.3x
revenue.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
One notable trend in 2015 was non-tech companies looking to acquire
information and tech businesses. Examples with deal values above $1
billion were car manufacturers BMW Group, Audi Group, and Mercedes-Benz
with the acquisition of HERE, a digital mapping and location
intelligence business, for $3.1 billion; and defense contractor Raytheon
with the acquisition of Websense, a cyber-security firm, for $1.9
billion.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Meanwhile, transactions highlighting this trend with deal values below
$1 billion included audio and infotainment manufacturer Harmon
International, which serves several markets such as the automotive
sector, with the acquisition of Symphony Teleca, a software engineering
and integration service, for $548 million and Red Bend Software, a
provider of software management for connected devices, for $170 million;
and aircraft manufacturer Boeing with the acquisition of Peters
Software, a provider of aviation training content for commercial and
private pilots, as well as 2d3 Sensing, an imagery software company that
processes critical intelligence and surveillance data.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Regarding the three horizontal markets in the report, volume in the
Media & Marketing portion of the Information Industry improved eight
percent over the past year. Transaction value in the horizontal’s B2B
Publishing and Information segment more than doubled, from $9.38 billion
to $23.01 billion. B2B was also the best represented Media segment with
five of the top ten highest value deals in the horizontal.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
As for the Software horizontal, deal activity rose nine percent in
2015. This included a 19 percent gain in the Infrastructure segment. In
terms of specific buyers, the most active Infrastructure acquirer during
the year was IBM with six transactions. This consisted of Gravitant, a
developer of hybrid cloud brokerage software; CleverSafe, a data storage
technology company; StrongLoop, a software provider that enables
developers to build APIs that connect applications and devices; Appcore,
a cloud automation management platform; Blue Box Group, a managed
private cloud provider built on OpenStack; and AlchemyAPI, a cognitive
computing company that will integrate with IBM’s Watson platform.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Online & Mobile horizontal market saw volume increase 12
percent between 2014 and 2015. The number of deals in the E-Commerce
segment gained 16 percent. In terms 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. This consisted of HomeAway,
an online marketplace for the vacation rental industry, for $3.24
billion; as well as Orbitz Worldwide for $1.42 billion and
Travelocity.com for $280 million.</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2015FY/info.aspx#sthash.lTJwD25U.dpuf</span></span></div>
<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
<h1>
<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Information Industry M&A Report For Full Year 2015
</span></span></h1>
<div id="ctl00_ctl00_bodyContent_BodyContent_PublicationDate">
<div class="date">
<span style="font-size: small;"><span style="font-family: inherit;">
Wednesday, January 13, 2016</span></span></div>
</div>
<div class="module-position mctop">
<div id="ctl00_ctl00_bodyContent_BodyContent_mpMainContentTop_pnlModules">
</div>
</div>
<div id="content-main">
<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — January 13, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its
full year 2015 mergers and acquisitions trend report for the Information
Industry.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Information report features companies in the Media & Marketing,
Software, and Online & Mobile Industries. It analyzes M&A
activity during 2015 and compares it with data covering 2013 and 2014.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
According to Berkery Noyes’ latest research there was a nine percent
increase in deal volume. Total value in the Information Industry gained
49 percent on a year-to-year basis, from $230.81 billion to $342.78
billion. This rise in value was attributable in large part to Dell’s
announced acquisition of EMC Corporation for $67.48 billion, which was
the highest value deal ever recorded in the industry. The EMC deal
accounted for about one-fifth percent of the Information Industry’s
aggregate value during the year. Without this transaction, overall value
rose 19 percent.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The industry’s median revenue multiple declined from 2.3x in 2014 to
2.1x in 2015, while the median EBITDA multiple decreased from 11.5x to
10.7x. Deals in the $10-$20 million range over the past three years
received a median enterprise value multiple of 2.1x revenue, whereas
those above $160 million had a median enterprise value multiple of 3.3x
revenue.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
One notable trend in 2015 was non-tech companies looking to acquire
information and tech businesses. Examples with deal values above $1
billion were car manufacturers BMW Group, Audi Group, and Mercedes-Benz
with the acquisition of HERE, a digital mapping and location
intelligence business, for $3.1 billion; and defense contractor Raytheon
with the acquisition of Websense, a cyber-security firm, for $1.9
billion.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Meanwhile, transactions highlighting this trend with deal values below
$1 billion included audio and infotainment manufacturer Harmon
International, which serves several markets such as the automotive
sector, with the acquisition of Symphony Teleca, a software engineering
and integration service, for $548 million and Red Bend Software, a
provider of software management for connected devices, for $170 million;
and aircraft manufacturer Boeing with the acquisition of Peters
Software, a provider of aviation training content for commercial and
private pilots, as well as 2d3 Sensing, an imagery software company that
processes critical intelligence and surveillance data.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Regarding the three horizontal markets in the report, volume in the
Media & Marketing portion of the Information Industry improved eight
percent over the past year. Transaction value in the horizontal’s B2B
Publishing and Information segment more than doubled, from $9.38 billion
to $23.01 billion. B2B was also the best represented Media segment with
five of the top ten highest value deals in the horizontal.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
As for the Software horizontal, deal activity rose nine percent in
2015. This included a 19 percent gain in the Infrastructure segment. In
terms of specific buyers, the most active Infrastructure acquirer during
the year was IBM with six transactions. This consisted of Gravitant, a
developer of hybrid cloud brokerage software; CleverSafe, a data storage
technology company; StrongLoop, a software provider that enables
developers to build APIs that connect applications and devices; Appcore,
a cloud automation management platform; Blue Box Group, a managed
private cloud provider built on OpenStack; and AlchemyAPI, a cognitive
computing company that will integrate with IBM’s Watson platform.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Online & Mobile horizontal market saw volume increase 12
percent between 2014 and 2015. The number of deals in the E-Commerce
segment gained 16 percent. In terms 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. This consisted of HomeAway,
an online marketplace for the vacation rental industry, for $3.24
billion; as well as Orbitz Worldwide for $1.42 billion and
Travelocity.com for $280 million.</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2015FY/info.aspx#sthash.lTJwD25U.dpuf</span></span></div>
<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
<h1>
<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Information Industry M&A Report For Full Year 2015
</span></span></h1>
<div id="ctl00_ctl00_bodyContent_BodyContent_PublicationDate">
<div class="date">
<span style="font-size: small;"><span style="font-family: inherit;">
Wednesday, January 13, 2016</span></span></div>
</div>
<div class="module-position mctop">
<div id="ctl00_ctl00_bodyContent_BodyContent_mpMainContentTop_pnlModules">
</div>
</div>
<div id="content-main">
<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — January 13, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its
full year 2015 mergers and acquisitions trend report for the Information
Industry.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Information report features companies in the Media & Marketing,
Software, and Online & Mobile Industries. It analyzes M&A
activity during 2015 and compares it with data covering 2013 and 2014.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
According to Berkery Noyes’ latest research there was a nine percent
increase in deal volume. Total value in the Information Industry gained
49 percent on a year-to-year basis, from $230.81 billion to $342.78
billion. This rise in value was attributable in large part to Dell’s
announced acquisition of EMC Corporation for $67.48 billion, which was
the highest value deal ever recorded in the industry. The EMC deal
accounted for about one-fifth percent of the Information Industry’s
aggregate value during the year. Without this transaction, overall value
rose 19 percent.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The industry’s median revenue multiple declined from 2.3x in 2014 to
2.1x in 2015, while the median EBITDA multiple decreased from 11.5x to
10.7x. Deals in the $10-$20 million range over the past three years
received a median enterprise value multiple of 2.1x revenue, whereas
those above $160 million had a median enterprise value multiple of 3.3x
revenue.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
One notable trend in 2015 was non-tech companies looking to acquire
information and tech businesses. Examples with deal values above $1
billion were car manufacturers BMW Group, Audi Group, and Mercedes-Benz
with the acquisition of HERE, a digital mapping and location
intelligence business, for $3.1 billion; and defense contractor Raytheon
with the acquisition of Websense, a cyber-security firm, for $1.9
billion.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Meanwhile, transactions highlighting this trend with deal values below
$1 billion included audio and infotainment manufacturer Harmon
International, which serves several markets such as the automotive
sector, with the acquisition of Symphony Teleca, a software engineering
and integration service, for $548 million and Red Bend Software, a
provider of software management for connected devices, for $170 million;
and aircraft manufacturer Boeing with the acquisition of Peters
Software, a provider of aviation training content for commercial and
private pilots, as well as 2d3 Sensing, an imagery software company that
processes critical intelligence and surveillance data.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Regarding the three horizontal markets in the report, volume in the
Media & Marketing portion of the Information Industry improved eight
percent over the past year. Transaction value in the horizontal’s B2B
Publishing and Information segment more than doubled, from $9.38 billion
to $23.01 billion. B2B was also the best represented Media segment with
five of the top ten highest value deals in the horizontal.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
As for the Software horizontal, deal activity rose nine percent in
2015. This included a 19 percent gain in the Infrastructure segment. In
terms of specific buyers, the most active Infrastructure acquirer during
the year was IBM with six transactions. This consisted of Gravitant, a
developer of hybrid cloud brokerage software; CleverSafe, a data storage
technology company; StrongLoop, a software provider that enables
developers to build APIs that connect applications and devices; Appcore,
a cloud automation management platform; Blue Box Group, a managed
private cloud provider built on OpenStack; and AlchemyAPI, a cognitive
computing company that will integrate with IBM’s Watson platform.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Online & Mobile horizontal market saw volume increase 12
percent between 2014 and 2015. The number of deals in the E-Commerce
segment gained 16 percent. In terms 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. This consisted of HomeAway,
an online marketplace for the vacation rental industry, for $3.24
billion; as well as Orbitz Worldwide for $1.42 billion and
Travelocity.com for $280 million.</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2015FY/info.aspx#sthash.lTJwD25U.dpuf</span></span></div>
<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
<h1>
<span style="font-size: small;"><span style="font-family: inherit;">Berkery Noyes Releases Information Industry M&A Report For Full Year 2015
</span></span></h1>
<div id="ctl00_ctl00_bodyContent_BodyContent_PublicationDate">
<div class="date">
<span style="font-size: small;"><span style="font-family: inherit;">
Wednesday, January 13, 2016</span></span></div>
</div>
<div class="module-position mctop">
<div id="ctl00_ctl00_bodyContent_BodyContent_mpMainContentTop_pnlModules">
</div>
</div>
<div id="content-main">
<span style="font-size: small;"><span style="font-family: inherit;"><span style="font-weight: bold;">NEW YORK — January 13, 2016 — </span>Berkery
Noyes, an independent mid-market investment bank, today released its
full year 2015 mergers and acquisitions trend report for the Information
Industry.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Information report features companies in the Media & Marketing,
Software, and Online & Mobile Industries. It analyzes M&A
activity during 2015 and compares it with data covering 2013 and 2014.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
According to Berkery Noyes’ latest research there was a nine percent
increase in deal volume. Total value in the Information Industry gained
49 percent on a year-to-year basis, from $230.81 billion to $342.78
billion. This rise in value was attributable in large part to Dell’s
announced acquisition of EMC Corporation for $67.48 billion, which was
the highest value deal ever recorded in the industry. The EMC deal
accounted for about one-fifth percent of the Information Industry’s
aggregate value during the year. Without this transaction, overall value
rose 19 percent.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The industry’s median revenue multiple declined from 2.3x in 2014 to
2.1x in 2015, while the median EBITDA multiple decreased from 11.5x to
10.7x. Deals in the $10-$20 million range over the past three years
received a median enterprise value multiple of 2.1x revenue, whereas
those above $160 million had a median enterprise value multiple of 3.3x
revenue.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
One notable trend in 2015 was non-tech companies looking to acquire
information and tech businesses. Examples with deal values above $1
billion were car manufacturers BMW Group, Audi Group, and Mercedes-Benz
with the acquisition of HERE, a digital mapping and location
intelligence business, for $3.1 billion; and defense contractor Raytheon
with the acquisition of Websense, a cyber-security firm, for $1.9
billion.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Meanwhile, transactions highlighting this trend with deal values below
$1 billion included audio and infotainment manufacturer Harmon
International, which serves several markets such as the automotive
sector, with the acquisition of Symphony Teleca, a software engineering
and integration service, for $548 million and Red Bend Software, a
provider of software management for connected devices, for $170 million;
and aircraft manufacturer Boeing with the acquisition of Peters
Software, a provider of aviation training content for commercial and
private pilots, as well as 2d3 Sensing, an imagery software company that
processes critical intelligence and surveillance data.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
Regarding the three horizontal markets in the report, volume in the
Media & Marketing portion of the Information Industry improved eight
percent over the past year. Transaction value in the horizontal’s B2B
Publishing and Information segment more than doubled, from $9.38 billion
to $23.01 billion. B2B was also the best represented Media segment with
five of the top ten highest value deals in the horizontal.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
As for the Software horizontal, deal activity rose nine percent in
2015. This included a 19 percent gain in the Infrastructure segment. In
terms of specific buyers, the most active Infrastructure acquirer during
the year was IBM with six transactions. This consisted of Gravitant, a
developer of hybrid cloud brokerage software; CleverSafe, a data storage
technology company; StrongLoop, a software provider that enables
developers to build APIs that connect applications and devices; Appcore,
a cloud automation management platform; Blue Box Group, a managed
private cloud provider built on OpenStack; and AlchemyAPI, a cognitive
computing company that will integrate with IBM’s Watson platform.</span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;">
The Online & Mobile horizontal market saw volume increase 12
percent between 2014 and 2015. The number of deals in the E-Commerce
segment gained 16 percent. In terms 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. This consisted of HomeAway,
an online marketplace for the vacation rental industry, for $3.24
billion; as well as Orbitz Worldwide for $1.42 billion and
Travelocity.com for $280 million.</span></span></div>
<span style="font-size: small;"><span style="font-family: inherit;"> - See more at: http://www.berkerynoyes.com/publication/pr/2015FY/info.aspx#sthash.lTJwD25U.dpuf</span></span></div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-71784370769694428212016-05-19T05:45:00.001-07:002016-05-19T05:45:35.949-07:00 2016's M&A Activity and the Future of M&E - Manatt Phelps & Phillips LLP <br />
Content is still king. With Dalian Wanda Group's $3.5 billion
acquisition of Legendary Entertainment in January, this year's media and
entertainment M&A activity kicked off with a bang that hasn't
slowed down. Comcast's $3.8 billion acquisition of DreamWorks Animation
just three months later continued the trend of content consolidation and
IP aggregation. Both transactions have varying motivations, but the
common denominator is access to franchises and content that can be
leveraged across the parent companies' various business units. Content
and digital transformation strategies have driven M&A activity so
far in 2016 with no signs of slowing down, giving clues about where
we'll see activity during the rest of the year.<br />
<br />
One major trend that continues is Chinese investment flowing into the United States. Almost <a href="http://www.solganickco.com/wp-content/uploads/2016/04/Solganick-Co-Digital-Media-MnA-Update-Q1-2016-Final.pdf" target="_blank">50% of all U.S.-targeted M&A transactions</a>
from foreign investors came from China in Q1, and media and
entertainment is a significant driver of that figure. In addition to
acquisitions, there were a number of investments in U.S. film studios,
including Film Carnival's <a href="http://variety.com/2016/film/news/dick-cook-china-film-carnival-investment-1201741034/" target="_blank">$500 million</a> investment in Dick Cook Studios and Perfect World Pictures' <a href="http://variety.com/2016/biz/news/universal-perfect-world-deal-complete-1201707633/" target="_blank">$500 million</a>
investment in Universal Pictures' upcoming film slate. China's
continued interest in gaining insight into how Hollywood works is paying
off for both sides of these deals. This insight will continue to help
them ramp up their own production capabilities and speed up their
ability to compete with the current global content creators. As a
result, Chinese investment and M&A in U.S. media and entertainment
should continue throughout 2016.<br />
<br />
<a href="https://www.manatt.com/manatt-digital-media/Deals-Defining-Media-and-Entertainment-in-2016.aspx">Complete report</a>Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-62803809927900834162016-05-19T05:43:00.001-07:002016-05-19T05:43:30.623-07:00M&A at a Glance (May 2016) - Paul, Weiss, Rifkind, Wharton & Garrison LLP<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
M&A at a Glance (May 2016)</div>
<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
</div>
The M&A market was mixed in April 2016, with the U.S. market
generally faring better than the global market. In the U.S., overall
deal volume increased by 71.1% to $115.57 billion, which is the highest
monthly deal volume for the U.S. in 2016. The increase in total U.S.
deal volume for April 2016 is largely attributable to U.S. strategic
activity, which increased by 95.4% to $96.38 billion in volume, as
compared to March 2016. U.S. sponsor-related activity, on the other
hand, was relatively flat with an increase of 5.4% to $19.19 billion in
volume. The total number of U.S. M&A transactions decreased by 6.3%
to 711.<br />
<br />
Conversely, global M&A activity declined slightly in April 2016,
with overall deal volume decreasing by 0.4% to $235.11 billion, and
global strategic deal volume decreasing by 2.5% to $187.92 billion.
Global sponsor-related deal volume, however, was up by 9.2% to $47.18
billion. The total number of transactions globally decreased by 10.7%
to 2,821, while average global deal value increased by 17% to $159.6
million. Figure 1.<br />
<br />
<a href="https://www.paulweiss.com/practices/transactional/mergers-acquisitions/publications/ma-at-a-glance-%28may-2016%29.aspx?id=21909">Complete report: </a><br />
<br />
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-50392093605193659862016-02-04T11:33:00.001-08:002016-02-04T11:33:23.023-08:00Do venture capitalists matter?<br />
Okay, entrepreneurs and venture capitalists, here are two
words that can help your investment in a startup business succeed:
direct flights.<br />
<br />
A new study co-authored by an MIT
professor shows that venture capitalists do help startup firms by
closely monitoring their development, and that the availability of
direct airplane flights between the two parties helps improve that
oversight.<br />
<br />
Indeed, the introduction of a new airline
route directly connecting venture capitalists to fledgling companies in
which they have already invested leads to a 3.1 percent increase in the
patents those firms are granted, as well as a 5.8 percent increase in
the citations those patents receive -- compared to equivalent cases
where similar investments are made but direct flights never become
available.<br />
<br />
"The effect is that those companies become
more innovative," says Xavier Giroud, an associate professor of finance
at the MIT Sloan School of Management.<br />
<br />
The research
examines nearly 23,000 startups that worked with more than 3,000 venture
capital firms over a 30-year period. The study took into account
regional economic trends, to make sure that the successes of startups
and the introduction of direct flights were not both themselves the
consequence of larger economic developments.<br />
<br />
The paper
detailing the study, "The Impact of Venture Capital Monitoring," will be
published in the Journal of Finance. The co-authors are Giroud, who is
the Ford International Career Development Professor of Finance; Shai
Bernstein, an assistant professor at Stanford University's Graduate
School of Business; and Richard R. Townsend, an assistant professor at
Dartmouth's Tuck School of Business.<br />
<br />
Other things being equal<br />
<br />
Venture
capitalists (often called VCs) usually provide critical early-stage
funding for startup firms across a variety of high-tech industries. This
paper addresses a long-running question in the business world: Do
venture capitalists actually improve the operations of the firms they
back, or are they just identifying startups that are destined to succeed
(or fail) in any case?<br />
<br />
As Giroud acknowledges, it has long been "an open question whether it [VC involvement] is something that adds value."<br />
<br />
Answering
in the affirmative, the study zeroes in on cases where direct flights
were introduced between areas in which VCs and startups had already
established their business relationships. That meant the researchers
could compare, on aggregate, two kinds of startups, separated by one
variable: Startups whose VCs began working with them more closely during
the period of investment, due to the easier travel that became
available; and startups in which the VCs remained consistently less
involved.<br />
<br />
To conduct the study, the researchers
employed data from three separate sources: the Thomson Reuters
VentureXpert database on VC investments, the National Bureau of Economic
Research Patent Data Project, and Department of Transportation data on
flights. The three data sets overlapped from 1977 through 2006.<br />
<br />
Giroud,
Bernstein, and Townsend also conducted a separate survey of 306 venture
capital firms to see if the presence of direct flights increased the
amount of contact VCs had with the start-ups they had invested in. About
86 percent of the respondents agreed that direct flights allow VCs to
spend more time monitoring the firms in their portfolios.<br />
<br />
The
scholars were conscious of the possibility that regional economic
conditions may also affect the distribution and success rates of
start-ups, and they adjusted their findings to take into account the
annual economic trends of each metropolitan area in question, using the
same definitions as the U.S. Census Bureau. That helped them conclude
that VC monitoring matters, and that the relative success of start-ups
at different times and places was not simply driven by external factors,
such as a local economic boom that might also lead to more direct
flights.<br />
<br />
The consequence, the researchers write in the paper, is that "pre-existing trends are not driving our results."<br />
<br />
The
study also found that startups connected to their VCs by direct flights
are also 1.0 percent more likely to issue a public stock offering and
1.4 percent more likely to have a successful "exit" from their start-up
incarnation, via public stock offering or acquisition by another
company.<br />
<br />
"They are more likely to have a successful IPO," Giroud notes.<br />
<br />
Entrepreneurship all over the place<br />
<br />
All
told, the study examined 22,896 startup companies and 3,158 VC firms.
Among other things, they found a wider dispersion of both startups and
VCs than the popular image might suggest. About 50 percent of startups
and VCs in the study were located outside of Northern California, New
England, and New York, the three areas most commonly associated with
high-tech startups and investors.<br />
<br />
"There are entrepreneurial firms all over the place," Giroud observes.<br />
<br />
For
his part, Giroud also suggests at least one local or regional policy
application of the findings: Lobby for more connections between your
nearest airport and the rest of the world.<br />
<br />
"Suppose you
want to promote entrepreneurship in a given area," Giroud says. "One
policy could be to promote the availability of [more] direct flights
between the area and VC hubs."<br />
<br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-4325347194185001562015-11-12T14:07:00.001-08:002015-11-12T14:07:08.229-08:00Europe | 3Q | 2015 VENTURE CAPITAL REPORT
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: white; font-weight: 300;">Venture Capital Repor
</span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation,
and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 500;">Highlights for 3Q 2015 include:
</span></span></span><br />
<ul style="list-style-type: none;">
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">European venture capital fundraising falls from prior quarter;
</span></span></span><br />
</li>
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">Venture capital investment into European companies improves in consecutive quarters;
</span></span></span><br />
</li>
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">The number of initial public offerings (IPOs) experienced a decrease from the prior quarter, while the number of mergers and acquisitions (M&As)
are on the rise.
</span></span></span><br />
</li>
</ul>
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #02a3d5; font-weight: 700;">] </span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">FUNDRAISING </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">13 European venture capital funds accumulated<br />
</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">853 million during 3Q 2015, dropping 58% in capital raised
from 2Q 2015 with a 52% decrease in the number of fund
closings.
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">Compared with the year ago period, euros raised improved
by 5%, despite a reduction in the number of<br />
fund closing (from 20 to 13).
</span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">The largest fund of the quarter was Lakestar II LP, which
raised </span><span style="color: #0c2a31; font-weight: 300;"><span style="color: #0c2a31; font-weight: 300;"> </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">350 million, accounting for 41% of the total amount </span> for 3Q 2015.
</span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">FINANCING
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">European companies raised over </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">3 billion for 355 deals during 3Q
2015, a minimal increase in the amount raised from 2Q 2015 despite
a 5% slide in the number of deals completed.
</span></span></span><br />
<ul style="list-style-type: none;">
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">In contrast with the year ago period, both investment and
number of completed deals improved, respectively<br />
by 31% and 1%.
</span></span></span><br />
</li>
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">Consumer Services (</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">935 million) was the strongest sector of
the quarter in terms of attracting investment followed by
Healthcare (</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">929 million).
</span></span></span><br />
</li>
</ul>
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">FINANCING </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">Consumer Services received the largest allocation of investment during 3Q 2015
(31%), accumulating </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">935 million through 103 deals. Deal flow rose by 5% from
the prior quarter, despite a 33% drop in capital invested.
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">Healthcare placed second in terms of equity financing raising </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">929 million across
62 deals, an improvement of 101% in capital raised and 13% in deals completed
from the previous quarter.
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">Business and Financial services placed third, with companies in the sector
gathering 25% of the total amount invested for the quarter. The sector received
</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">746 million across 112 deals; a rise of 12% in capital invested and of 8% in deal
flow from 2Q 2015.
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">FINANCING
</span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">The United Kingdom was the most favoured destination for equity financing during 3Q 2015, receiving </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">947 million across 87 deals. The country took 31% of all equity financing for the quarter, despite a 9% decrease in deal flow</span><span style="font-weight: 700; vertical-align: 6pt;">
</span><span style="color: #0c2a31; font-weight: 300;">from 2Q 2015.
</span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #394859; font-weight: 300; vertical-align: 6pt;">
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">France placed second, attracting a 19% share of European financing. </span><span style="color: #0c2a31; font-weight: 300;"></span><span style="color: #0c2a31; font-weight: 300;">Investment reached a total </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">567 million, a 29% rise in capital invested, despite</span> a 22% drop in number of deals. <span style="color: #0c2a31; font-weight: 300;"></span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">Germany occupies third position raising </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">428 million, 14% of the total for the </span><span style="color: #0c2a31; font-weight: 300;">quarter. </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">Switzerland placed fourth with a 6% share, raising </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">194 million during </span><span style="color: #394859; font-weight: 300; vertical-align: 6pt;"></span><span style="color: #0c2a31; font-weight: 300;"></span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">LIQUIDITY </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">43 venture-backed M&As took place in Europe
during 3Q 2015, a 2% increase from 2Q 2015 but a
12% drop from 3Q 2014.
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">A total of </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">2.7 billion were raised through VC-backed
M&As in 3Q 2015, a decrease of 27% from the previous
quarter and a 9% drop compared to 3Q 2014.
</span></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">8 venture-backed IPOs took place during 3Q 2015, a
47% decrease from the prior quarter and a 50%
decrease in listings for VC-backed companies from the
year ago period.
</span></span></span><br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #7e8d9b; font-weight: 700;">LIQUIDITY </span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31; font-weight: 300;">8 venture-backed IPOs took place during 3Q 2015, a
decrease in number of deals both to the prior quarter and
the previous year.
</span></span></span><br />
<ul style="list-style-type: none;">
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">IPOs raised almost </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">700 million during 3Q 2015, an
increase of 31% from the </span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">533 million raised in 2Q 2015.
VC-backed companies also raised an higher amount
through IPOs when compared with the year ago period
(</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">447 million).
</span></span></span><br />
</li>
<li>
<span style="font-size: small;"><span style="font-family: inherit;"><span style="color: #0c2a31;">•</span><span style="color: #0c2a31;"> </span><span style="color: #0c2a31; font-weight: 300;">The largest European VC-backed IPO of 3Q 2015<br />
was the Flow Traders listing in July. The company raised
</span><span style="color: #0c2a31; font-weight: 300;">€</span><span style="color: #0c2a31; font-weight: 300;">521 million for its offering on the Amsterdam Exchange
Index.
</span></span></span><br />
</li>
</ul>
</div>
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
</div>
</div>
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com1tag:blogger.com,1999:blog-796146979950276147.post-41757094622098174132015-09-21T11:45:00.004-07:002015-09-21T11:45:55.597-07:00Berkery Noyes Information Industry M&A Report For Half Year 2015<br />
Berkery Noyes has released its <a href="http://www.berkerynoyes.com/doc/2015half/information.aspx">half year 2015 mergers and acquisitions trend report for the Information Industry.</a><br />
<br />The Information report features companies in the Media & Marketing, Software, and Online & Mobile Industries. It analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.<br />
<br />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.<br />
<br />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.<br />
<br />Deal volume in the Infrastructure Software segment stayed about the same during the half year period. This followed a 32 percent increase in second half 2014. Three of the horizontal’s top five largest deals in first half 2015 were completed in the segment, two of which occurred in the cyber-security subsector.<br />
<br />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. Meanwhile, SaaS & Cloud deals in first half 2015 received a median revenue multiple of 3.5x, compared to 2.3x for the entire Online & Mobile market.<br />
<br />M&A volume in the consumer application subsector increased 12 percent, from 119 to 133 transactions. Notable mobile-based deals in first half 2015 included clothing manufacturer Under Armour’s acquisition of MyFitnessPal, a digital health mobile application focused on nutrition, for $474 million; Ola’s acquisition of TaxiforSure, a taxi rental aggregator, for $200 million; and Dropbox’s acquisition of CloudOn, which allows users to create and edit documents on mobile devices, for $100 million.<br />
<br />Deal flow in the overall Media and Marketing horizontal increased two percent over the past six months. The horizontal’s largest transaction in first half 2015 was Verizon Communications’ acquisition of AOL for $4.13 billion in the Internet Media segment. Internet Media volume also saw a 25 percent rise, from 208 to 259 deals. In addition to 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.<br />
<br />Marketing transaction volume underwent a four percent increase in first half 2015. In addition, deals in the digital marketing subsector represented 45 percent of the segment’s overall activity in first half 2015. Japanese advertising company Dentsu was the overall industry’s most active acquirer with nine transactions year-to-date.<br />
<br />“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.”<br />
<br />
Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com2tag:blogger.com,1999:blog-796146979950276147.post-73475382461790962362015-09-21T11:41:00.003-07:002015-09-21T11:41:33.258-07:00Berkery Noyes Healthcare/Pharma Information and Technology Industry M&A Report For Half Year 2015<br />
Berkery Noyes has released its<a href="http://www.berkerynoyes.com/doc/2015half/healthcare.aspx"> half year 2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry</a>.<br />
<br />The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.<br />
<br />Total deal volume increased 16 percent relative to second half 2014. Transactions completed by strategic acquirers rose from 138 to 163 deals, whereas those backed by financial sponsors improved from 52 to 57 deals. Aggregate value fell 43 percent, from $10.70 billion to $6.06 billion. However, value gained 24 percent on a year-over-year basis. Also of note, seven of the industry’s top ten largest deals last year occurred in second 2014.<br />
<br />The peak for volume throughout the previous two-and-a-half years occurred in first half 2015 while value reached its zenith in second half 2014. In terms of valuations, the median revenue multiple over the past six months decreased from 3.0x to 2.7x, which remained slightly above its median throughout the last 30 months.<br />
<br />The industry’s largest transaction year-to-date was MEDNAX’s acquisition of vRad, an outsourced radiology physician services and telemedicine company, for $500 million. This occurred in the Healthcare Business Services segment. Meanwhile, M&A activity in the segment increased 53 percent, from 34 to 52 deals.<br />
<br />Transaction volume in the Healthcare IT segment remained about constant, with a total of 101 deals. This represented a 29 percent increase compared to first half 2014 and was the segment’s highest point throughout the past two-and-a-half years. Moreover, there was a 16 percent rise in the number of strategic acquisitions in the Healthcare IT segment, from 69 in second half 2014 to 80 deals in first half 2015. Strategic acquirers accounted for 79 percent of Healthcare IT volume year-to-date.<br /><br />
The Consumer Health segment saw a slight uptick, from 14 to 16 deals. Clothing manufacturer Under Armour was a notable Consumer Health acquirer with two mobile-based acquisitions in first half 2015 relating to digital health data, nutrition information, and fitness tracking. Along these lines, Under Armour acquired MyFitnessPal for $475 million and Endomondo for $85 million. These two transactions will build upon Under Armour’s previous acquisition of MapMyFitness for $150 million in 2013.<br />
<br />As for other markets covered in the report, volume in the Medical Education segment more than doubled, from 9 to 20 deals. Transaction volume in the combined Pharma IT, Pharma Business Services, and Pharma Information stayed nearly the same, from 23 to 25 deals. One of the largest related transactions in first half 2015 was ICON’s acquisition of MediMedia Pharma Solutions, a provider of scientific analysis, assessment, research and insights for the biopharmaceutical and medical device industries, for $120 million.<br />
<br />“In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are healthcare information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.”<br />
<br />O’Connor continued, “Interestingly, strategic buyers are dominating the deal flow and high multiples. However, financial buyers remain on the hunt, are focused on high growth assets, and have over $500 billion of dry powder which they can leverage 4x-8x. We haven’t seen such a seller’s market since the 2004-2007 timeframe. With all the attractive dynamics noted above there remains a lack of quality assets of scale available, so any attractive assets are commanding high valuations and multiple buyers.”<br />
<br />“The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, shifting responsibilities between payors and providers, and in increased regulatory environment,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enable healthcare IT companies that effectively address market niches and have some level of scale are in high demand by both financial and strategic buyers.”<br /><br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com1tag:blogger.com,1999:blog-796146979950276147.post-81515094086394632362015-09-21T11:38:00.003-07:002015-09-21T11:38:48.856-07:00Berkery Noyes: Financial Technology and Information Industry M&A Report For Half Year 2015<br />
Berkery Noyes has released its <a href="http://www.berkerynoyes.com/doc/2015half/fintech.aspx">half year 2015 mergers and acquisitions trend report for the Financial Technology and Information Industry.</a><br />
<br />The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.<br />
<br />Total transaction volume decreased seven percent in first half 2015. Aggregate deal value increased 17 percent, from $16.21 billion to $18.90 billion. When compared to first half 2014, volume rose 14 percent and value gained 63 percent. The peak for volume throughout the last 30 months occurred in second half 2014 while value reached its zenith in first half 2015.<br />
<br />The median revenue multiple increased from 2.8x in second half 2014 to 4.5x in first half 2015. Of note, deals during the last two-and-a-half years with enterprise values above $160 million received a median revenue multiple of 4.5x and median EBITDA multiple of 16.2x, whereas those in the $10-$20 million range had a median revenue multiple of 1.7x and median EBITDA multiple of 9.0x.<br /><br />
The segment with the largest increase in volume during first half 2015 was Capital Markets with a 31 percent rise, from 58 to 76 deals. Four of the top ten deals also occurred in the Capital Markets segment. Notable related transactions included SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management software, for $2.6 billion; Playtech’s acquisition of Plus500, an online FOREX trading platform that serves retail customers, for $697 million; BATS Global Markets’ acquisition of KCG Hotspot FX, a FOREX trading venue and electronic communication network, for $365 million; and Bridgepoint’s acquisition eFront SA, which offers software solutions focused on alternative investments and risk management, for $327 million.<br />
<br />“An increased appetite for technology spending at financial institutions is presenting vendors with good pipelines and an increased array of legacy tech sellers,” stated Peter Ognibene, Managing Director at Berkery Noyes. “In addition, regulatory pressures are requiring more transparency pertaining to risk assessment and valuation methods.”<br />
<br />Meanwhile, the number of transactions in the Banking segment remained about constant on a half year basis. Notable Banking deals in first half 2015 included Bottomline Technologies’ acquisition of Intellinx, a provider of cyber fraud and risk management solutions, for $67 million; and Temenos Group’s acquisition of Akcelerant Holdings, which offers origination, account servicing, collection, and risk management software, for $50 million. As for the Insurance segment, transaction volume rose 15 percent, from 26 to 30 deals.<br />
<br />The overall industry’s decrease in volume over the past six months was attributable in major part to a 41 percent decline in the Payments segment. This came in the aftermath of a 46 percent increase in second half 2014, which was the segment’s highest point over the past two-and-a-half years. In terms of value, six of the industry’s top ten largest deals year-to-date were Payments related. Three of these six transactions reached the $1 billion threshold. This consisted of a private equity consortium’s acquisition of ICBPI, an Italian payments and clearing services company, for $2.5 billion; Optimal Payments’ acquisition of Skrill Group, a digital payments business, for $1.7 billion; and Davis + Henderson’s acquisition of FundTech, a payments and transaction banking software company, for $1.3 billion.<br />
<br />“The payments sector had many license-and-maintenance legacy business models, which are good, but not always the most attractive to buyers,” said John Guzzo, Managing Director at Berkery Noyes. “Today, companies prefer subscription based business models. Moreover, as companies continue to pursue electronic bill payment and online payments to eliminate paper bills, the payments industry may see more mergers in that space in the future.” Guzzo continued, “Data analytics represent another attractive and growing field in payments for buyers as they seek to harness vital customer and transaction data and repackage it for marketing and sales purposes. Payments companies want to offer more intelligence to their customers.”<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-71136556329914067812015-09-18T08:23:00.000-07:002015-09-18T08:23:15.654-07:00Berkery Noyes: Media and Marketing Industry M&A Report For Half Year 2015<br />
Berkery Noyes has released its<a href="http://www.berkerynoyes.com/publication/trends/2015half/Media.aspx"> half year 2015 mergers and acquisitions trend report for the Media and Marketing Industry.</a> The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.<br />
<br />Deal volume saw a three percent uptick on a half year basis, from 841 to 863 transactions. Total value fell 31 percent, from $52.72 billion to $36.48 billion. This analysis excludes the proposed mega-merger of Time Warner and Charter Communications, which falls outside the report’s purview. 11 of the industry’s top ten highest value deals in second half 2014 reached the $1 billion threshold, as opposed to five in first half 2015. The median revenue multiple over the past six months decreased from 2.1x to 1.9x, while the median EBITDA multiple declined from 12.0x to 8.7x.<br /><br />
The highest value deal in first half 2015 was Verizon Communications’ acquisition of AOL for $4.13 billion in the Internet Media segment. Internet Media also had the largest half year increase in volume, rising 25 percent.<br />
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Regarding specific Internet Media subsectors, there was a 36 percent rise in the online classifieds marketplace, from 47 to 64 acquisitions. One of the largest related deals thus far in 2015 was CoStar Group’s acquisition of Apartment Finder for $170 million.<br />
<br />Marketing transaction volume underwent a four percent increase in first half 2015. In addition, deals in the digital marketing subsector represented 45 percent of the segment’s overall activity in first half 2015. Japanese advertising company Dentsu was the overall industry’s most active acquirer with nine transactions year-to-date.<br />
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High profile Marketing deals in first half 2015 included GTCR and Adams Outdoor Advertising’s acquisition of Fairway Outdoor Advertising for $575 million; Red Ventures’ acquisition of Pitney Bowes’ marketing services business, Imagitas, for $310 million; and Solera Holdings’ acquisition of DMEautomotive, a provider of marketing solutions for the retail automotive industry, for $143 million.<br /><br />
As for other sectors covered in the report, deal flow in the Consumer Publishing segment remained about constant. The segment’s highest value transaction in first half 2015 was Capmark Financial Group’s acquisition of Orchard Brands, a multi-brand family of 13 catalog and eCommerce brands that that serve the boomer and senior demographics, for $410 million.<br />
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Other notable Consumer Publishing deals included New Media Investment Group’s acquisition of Stephens Media for $103 million and The Columbus Dispatch for $47 million; and Tribune Publishing’s acquisition of MLIM, the owner of the San Diego Union-Tribune, for $85 million. Another high profile consumer focused deal that spanned several segments was Sequential Brands Group’s acquisition of Martha Stewart Living Omnimedia, a diversified media and merchandising company, for $300 million.<br /><br />
The number of acquisitions in the B2B Publishing and Information segment fell 17 percent in first half 2015. This followed a 16 percent increase in second half 2014, which was the segment’s most active half year period during the past two-and-a-half years. Meanwhile, M&A volume in the Entertainment segment declined ten percent over the last six months. This marked a return to its average level over the preceding three half year periods.<br /><br />
Deal activity in the Exhibitions, Conferences, and Seminars segment saw a twelve percent improvement, from 43 to 48 transactions. This was the segment’s fourth consecutive half year increase and its peak for volume over the last 30 months.<br />
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Also of note, private equity backed deals in the segment nearly quintupled between second half 2014 and first half 2015, from four to 19 acquisitions. The segment’s largest transaction in first half 2015 was the acquisition of Cirque du Soleil by an investor group led by TPG Capital for $1.2 billion.<br /><br />
“Many media and marketing companies are looking for acquisitions to enhance their growth,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “They are also making investments in those areas where their clients are spending the most money and where they can sell their services at a premium. M&A activity is robust due to the high stock market valuations and the low cost of financing transactions.”<br /><br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com3tag:blogger.com,1999:blog-796146979950276147.post-23141063908742531142015-09-18T08:20:00.002-07:002015-09-18T08:20:45.956-07:00 Berkery Noyes: Software Industry M&A Report For Half Year 2015<br />
Berkery Noyes has released its <a href="http://berkerynoyes.com/publication/trends/2015half/software.aspx">half year 2015 mergers and acquisitions trend report for the Software Industry</a>. The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.<br />
<br />Berkery Noyes’ data showed that transaction volume increased three percent in first half 2015. This was the industry’s fourth consecutive half year rise throughout the last 30 months. Deal value fell nine percent on a half year basis, totaling $55.65 billion year-to-date. Private equity backed deals accounted for 42 percent of the industry’s aggregate value in first half 2015, compared to 35 percent in second half 2014 and 17 percent in first half 2014.<br />
<br />The median revenue multiple declined from 3.0x to 2.8x over the past six months. However, this represented a 17 percent rise compared to first half 2014, when the multiple was 2.4x. Of note, deals in first half 2015 with enterprise values above $160 million received a median revenue multiple of 3.8x and median EBITDA multiple of 25.1x, whereas those in the $10-$20 million range had a median revenue multiple of 2.4x and median EBITDA multiple of 13.4x.<br />
<br />Meanwhile, Microsoft was the most active strategic acquirer in first half 2015 with seven transactions. Microsoft has continued to complete M&A deals to bolster its mobile capabilities, as indicated by the recent acquisitions of Datazen, a mobile business intelligence and data visualization service; and Sunrise Atelier, the developer of a mobile calendar application.<br />
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In addition to these mobile-based deals, Microsoft acquired BlueStripe Software, an application management service that provides performance monitoring and troubleshooting solutions; 6Wunderkinder, a cloud-based task management platform; LiveLoop, a developer of collaboration tools for PowerPoint; Revolution Analytics, an open-source analytics firm focused on the statistical programming language R; and Equivio, an e-discovery software company.<br />
<br />As for software used within specific vertical industries or “Niche Software,” transaction volume increased 11 percent. Four of the industry’s top ten highest value deals year-to-date occurred in the segment, two of which were in the Capital Markets subsector.<br />
<br />Deal volume in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a two percent uptick relative to second half 2014. In terms of notable private equity backed deals in the Human Capital Management (HCM) subsector, Vector Capital acquired Saba Software for $270 million and Frontier Capital acquired a majority stake in Electronic Commerce for $40 million.<br />
<br />Elsewhere in the Business segment, PTC, a developer of software and technology solutions for manufacturers, was one acquirer that has been focusing on the Internet of Things (IoT). This included the acquisition of ColdLight Solutions for $105 million in first half 2015, which follows PTC’s acquisition of Axeda Corporation for $170 million in second half 2014 and ThingWorx for $130 million in second half 2013.<br />
<br />Transaction volume in the Infrastructure Software segment remained about constant during the half year period. This followed a 32 percent increase in second half 2014. Three of the industry’s top five largest deals in first half 2015 were completed in the Infrastructure segment. In addition to Informatica, this consisted of Bain Capital’s acquisition of Blue Coat Systems for $2.4 billion and Raytheon Company’s acquisition of Websense for $1.9 billion, both of which were in the cyber-security subsector. Of note, Websense was previously acquired by Vista Equity Partners for $955 million in 2013 and an investor group led by Thoma Bravo previously took Blue Coat private in 2011 for $1.1 billion.<br />
<br />Another cyber-security deal that made the top ten list in first half 2015 was telecommunications operator SingTel’s acquisition of Trustwave, a data security and compliance solutions firm, for $810 million. Cisco’s $635 million acquisition of OpenDNS, a network security company, just missed inclusion in the top ten.<br />
<br />Other high profile Infrastructure transactions year-to-date in different areas of the segment included EMC’s acquisition of Virtustream, a cloud computing management software company, for $1.2 billion; and CA Technologies’ acquisition of Rally Software, a provider of Agile development software and services, for $480 million.<br />
<br />“Acquirers are demanding a broad array of security capabilities that span the gamut of internal and external network and application users,” said James Berkery, Chief Information Officer of Berkery Noyes. “This includes vulnerability and intrusion detection and prevention, identity management, rogue device identification and other areas.” Berkery continued, “There is a need in the marketplace for solutions that support configuration, provisioning, firmware updates, diagnostics and security, particularly as the range of device types expands.”<br /><br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-2839450935673464182015-09-18T08:17:00.003-07:002015-09-18T08:17:28.125-07:00Berkery Noyes: Online and Mobile Industry M&A Report For Half Year 2015<br />
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Berkery Noyes has released its f<a href="http://www.berkerynoyes.com/publication/trends/2015half/Online.aspx">irst half 2015 mergers and acquisitions trend report for the Online and Mobile Industry. </a>The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.<br />
<br />Transaction volume increased 12 percent in first half 2015. Aggregate value rose nine percent, from $64.55 billion to $70.27 billion. The median revenue multiple decreased from 2.6x to 2.3x, while the median EBITDA multiple declined from 13.7x to 10.3x. The peak for both volume and value over the last 30 months occurred in first half 2015.<br />
<br />The most active segment year-to-date was SaaS & Cloud with 406 transactions, which represented a 16 percent increase compared to second half 2014. This was the segment’s highest level of activity on a half year basis during the past two-and-a-half years. Regarding valuations, SaaS & Cloud deals in first half 2015 received a median revenue multiple of 3.5x. The industry’s largest transaction in first half 2015 took place in the segment as well. This consisted of Cox Automotive’s acquisition of Dealertrack Technologies, a provider of web-based software solutions and services for automotive retailers, for $4.36 billion.<br />
<br />In terms of other high value Online and Mobile deals thus far in 2015, Verizon Communications acquired AOL for $4.13 billion. Verizon pursued this acquisition in part to bolster its digital and video advertising capabilities. AOL has been making deals of its own in the programmatic video buying space, such as in first half 2014 with the acquisition of PrecisionDemand, a television ad-targeting company. PrecisionDemand was merged with Adap.tv, the latter of which AOL acquired for $405 million in second half 2013.<br />
<br />Moreover, Comcast also completed a deal in first half 2015 with the acquisition of Visible World, a provider of targeted television advertising solutions. The cable operator was responsible for a related transaction in first half 2014 with the acquisition of FreeWheel, a video ad-serving company utilized by television networks and media companies, for $360 million.<br />
<br />Deal volume in the E-Marketing & Search segment experienced a two percent uptick in first half 2015. High profile deals in the digital marketing subsector included On Assignment’s acquisition of Creative Circle, a staffing agency that serves digital marketing companies, for $570 million; Twitter’s acquisition of TellApart, an ad-tech platform, for $533 million; NetSuite’s acquisition of Bronto Software, an email marketing automation provider for multi-channel retailers, for $200 million; Nielsen’s acquisition of eXelate, a data technology company that facilitates programmatic buying, for $200 million; The Rubicon Project’s acquisition of Chango, a programmatic advertising company, for $122 million; and AppNexus’ acquisition of Yieldex, an online advertising technology firm, for $100 million.<br />
<br />M&A volume in the E-Commerce segment improved ten percent in first half 2015. Five of the industry’s top ten largest acquisitions year-to-date were also E-Commerce related. As for specific E-Commerce subsectors, notable deals in the online food delivery market included Just Eat’s acquisition of Menulog Group for $687 million; Delivery Hero’s acquisition of Yemeksepeti for $589 million; and Yelp’s acquisition of Eat24 for $134 million.<br />
<br />The number of deals in the consumer application subsector increased 12 percent, from 119 to 133. Meanwhile, one of the largest mobile-based payments transactions in first half 2015 was PayPal’s acquisition of mobile wallet platform Paydiant for $280 million in the B2B subsector.<br />
<br />“Currently there is no dominant player in the mobile payments space, but giants like Apple, Google and PayPal are vying for control,” said Peter Ognibene, Managing Director at Berkery Noyes. “It is also important to note that mobile payments alone may not provide a value-added service for consumers. However, companies that can integrate a full range of products with their mobile payments platform provide a compelling reason for both consumers and merchants to adopt the technology.” Ognibene continued, “Another complimentary development in mobile payments landscape, the acceptance of host card emulation (HCE) by MasterCard and Visa, will further facilitate the expansion of mobile payments.”<br /><br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-92094137659320342612015-09-17T12:36:00.001-07:002015-09-17T12:36:29.048-07:00Berkery Noyes: Healthcare/Pharma Information and Technology Industry M&A Report For Half Year 2015<br />
Berkery Noyes, an independent mid-market investment bank, has released its half year <a href="http://www.berkerynoyes.com/publication/trends/2015half/healthcare.aspx">2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.</a><br />
<a href="http://www.berkerynoyes.com/publication/trends/2015half/healthcare.aspx">http://www.berkerynoyes.com/publication/trends/2015half/healthcare.aspx</a><br />The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.<br />
<br />Total deal volume increased 16 percent relative to second half 2014. Transactions completed by strategic acquirers rose from 138 to 163 deals, whereas those backed by financial sponsors improved from 52 to 57 deals. Aggregate value fell 43 percent, from $10.70 billion to $6.06 billion. However, value gained 24 percent on a year-over-year basis. Also of note, seven of the industry’s top ten largest deals last year occurred in second 2014.<br />
<br />The peak for volume throughout the previous two-and-a-half years occurred in first half 2015 while value reached its zenith in second half 2014. In terms of valuations, the median revenue multiple over the past six months decreased from 3.0x to 2.7x, which remained slightly above its median throughout the last 30 months.<br />
<br />The industry’s largest transaction year-to-date was MEDNAX’s acquisition of vRad, an outsourced radiology physician services and telemedicine company, for $500 million. This occurred in the Healthcare Business Services segment. Meanwhile, M&A activity in the segment increased 53 percent, from 34 to 52 deals.<br />
<br />Transaction volume in the Healthcare IT segment remained about constant, with a total of 101 deals. This represented a 29 percent increase compared to first half 2014 and was the segment’s highest point throughout the past two-and-a-half years. Moreover, there was a 16 percent rise in the number of strategic acquisitions in the Healthcare IT segment, from 69 in second half 2014 to 80 deals in first half 2015. Strategic acquirers accounted for 79 percent of Healthcare IT volume year-to-date.<br />
<br />The Consumer Health segment saw a slight uptick, from 14 to 16 deals. Clothing manufacturer Under Armour was a notable Consumer Health acquirer with two mobile-based acquisitions in first half 2015 relating to digital health data, nutrition information, and fitness tracking. Along these lines, Under Armour acquired MyFitnessPal for $475 million and Endomondo for $85 million. These two transactions will build upon Under Armour’s previous acquisition of MapMyFitness for $150 million in 2013.<br />
<br />As for other markets covered in the report, volume in the Medical Education segment more than doubled, from 9 to 20 deals. Transaction volume in the combined Pharma IT, Pharma Business Services, and Pharma Information stayed nearly the same, from 23 to 25 deals. One of the largest related transactions in first half 2015 was ICON’s acquisition of MediMedia Pharma Solutions, a provider of scientific analysis, assessment, research and insights for the biopharmaceutical and medical device industries, for $120 million.<br />
<br />“In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are healthcare information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.”<br />
<br />O’Connor continued, “Interestingly, strategic buyers are dominating the deal flow and high multiples. However, financial buyers remain on the hunt, are focused on high growth assets, and have over $500 billion of dry powder which they can leverage 4x-8x. We haven’t seen such a seller’s market since the 2004-2007 timeframe. With all the attractive dynamics noted above there remains a lack of quality assets of scale available, so any attractive assets are commanding high valuations and multiple buyers.”<br />
<br />“The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, shifting responsibilities between payors and providers, and in increased regulatory environment,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enable healthcare IT companies that effectively address market niches and have some level of scale are in high demand by both financial and strategic buyers.”<br /><br />
<br />Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0tag:blogger.com,1999:blog-796146979950276147.post-18607023419044336982015-09-17T12:26:00.003-07:002015-09-17T12:26:49.480-07:00Berkery Noyes: Education Industry M&A Report For Half Year 2015<br />
Berkery Noyes, an independent mid-market investment bank, has released its <a href="http://berkerynoyes.com/publication/trends/2015half/ed.aspx">half year 2015 mergers and acquisitions trend report</a> for the Education Industry.<br />
<br />The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information and technology companies servicing the Education Industry, including the K-12, Post-Secondary, Childcare Services, and Corporate and Professional Training segments.<br />
<br />Total transaction volume improved nine percent on a half year basis. In addition, private equity volume rose 38 percent, with a total of 51 transactions in first half 2015. Aggregate value increased 29 percent, from $4.75 billion to $6.11 billion. The peak for volume over the previous five half year periods occurred in first half 2015 whereas value reached its zenith in first half 2014.<br />
<br />As for overall value, nine of the top ten deals thus far in 2015 were completed by strategic acquirers. The industry’s largest transaction year-to-date was LinkedIn Corporation’s acquisition of Lynda.com, an online learning company that provides video tutorials and courses covering business, software, creative, and other areas, for $1.5 billion. This deal represented slightly more than one-fifth of the industry’s total value in first half 2015.<br />
<br />Deal volume in the K-12 Media and Tech segment increased 39 percent in first half 2015. Notable transactions included Houghton Mifflin’s acquisition of Scholastic Corporation’s Education and Technology Services business for $575 million; Pearson’s sale of Powerschool, a web-based K-12 student information system, to Vista Equity Partners for $350 million; Pearson’s sale of Family Education Network, a global leader in the consumer informal learning space, which owns one of the largest integrated digital audiences of kids, parents, and teachers in the world, to Sandbox Partners; Data Recognition Corporation’s acquisition of McGraw-Hill Education’s CTB assessment assets; and Blackboard’s acquisition of Schoolwires, an educational website, hosting, and content management provider to K-12 schools.<br />
<br />In terms of Blackboard’s recent deals, the Schoolwires transaction follows its previous acquisition of ParentLink, a provider of K-12 communications tools that help connect teachers with parents, in second half 2014. Blackboard also completed a transaction in the open source space in first half 2015 with the acquisition of Remote-Learner UK. This was Blackboard’s first open source related deal since its acquisition of Moodlerooms and NetSpot in first half 2012.<br />
<br />Meanwhile, the number of transactions in the combined Professional Training Technology and Services segments declined eight percent, from 65 to 60 deals. One high profile Professional Training acquirer year-to-date was Pluralsight with the acquisition of Code School, which offers online courses for developers, for $36 million. Also of note, Pluralsight acquired Smarterer, an online skills assessment platform, for $75 million and Digital-Tutors, an online training resource for creative professionals, for $45 million in 2014.<br />
<br />Regarding the Higher-Ed Media and Tech segment, volume increased 81 percent, from 21 to 38 deals. This was the highest point for Higher-Ed Media and Tech volume during the past two-and-a-half years when examined on a half year basis. Moreover, Higher-Ed Media and Tech was responsible for the industry’s largest rise in volume over the past six months.<br />
<br />“The large strategic players in the sector are the diversified education companies who are steadily moving away from print and becoming more heavily focused on digital and services,” said Peter Yoon, Managing Director at Berkery Noyes. “Companies like Houghton Mifflin continue to acquire as evidenced by their recent purchase of Scholastic’s Edtech division, and McGraw-Hill and Pearson continue to do the same in order to become less dependent on print revenues.”<br />
<br />Yoon continued, “Private equity firms are increasingly being drawn to the education and training sector, given the sheer scale of the market, the favorable lending environment, and the increasing number of companies that are growing with subscription based revenue models in the space. Part of the role that PE firms play in the sector is to create and grow companies of scale, which the strategic players often see as attractive acquisition opportunities due to the larger size. The influx of PE capital creates an environment which actually allows acquisitions by strategics to be more prevalent and impactful to the organization.”<br />
<br />“In the context of strong gains in online testing and assessment, automatic scoring and grading of essays are likely to develop more rapidly,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “One of the main challenges to overcome before this technology is more widely adopted is to improve the training in its use and overall understanding of its reliability and cost effectiveness.” Zandy continued, “At the post-secondary level, online homework grading in subjects such as math, chemistry, and other quantitative disciplines has made some headway. Considerable investment in companies with new assessment products will eventually lead to robust M&A activity with acquirers seeking to participate in this high growth and high profit area.”Jonathan Kantrowitzhttp://www.blogger.com/profile/13919729222396777240noreply@blogger.com0