Do venture capitalists matter?

Okay, entrepreneurs and venture capitalists, here are two words that can help your investment in a startup business succeed: direct flights.

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.

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.

"The effect is that those companies become more innovative," says Xavier Giroud, an associate professor of finance at the MIT Sloan School of Management.

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.

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.

Other things being equal

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?

As Giroud acknowledges, it has long been "an open question whether it [VC involvement] is something that adds value."

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.

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.

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.

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.

The consequence, the researchers write in the paper, is that "pre-existing trends are not driving our results."

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.

"They are more likely to have a successful IPO," Giroud notes.

Entrepreneurship all over the place

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.

"There are entrepreneurial firms all over the place," Giroud observes.

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.

"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."

Europe | 3Q | 2015 VENTURE CAPITAL REPORT

Venture Capital Repor

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. 

Highlights for 3Q 2015 include:

• •  European venture capital fundraising falls from prior quarter;
  
• •  Venture capital investment into European companies improves in consecutive quarters;
  
• •  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.
  

]

FUNDRAISING 

13 European venture capital funds accumulated
€853 million during 3Q 2015, dropping 58% in capital raised from 2Q 2015 with a 52% decrease in the number of fund closings.
• Compared with the year ago period, euros raised improved by 5%, despite a reduction in the number of
fund closing (from 20 to 13).

• The largest fund of the quarter was Lakestar II LP, which raised  €350 million, accounting for 41% of the total amount for 3Q 2015.

FINANCING
European companies raised over €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.

• •  In contrast with the year ago period, both investment and number of completed deals improved, respectively
  by 31% and 1%.
  
• •  Consumer Services (€935 million) was the strongest sector of the quarter in terms of attracting investment followed by Healthcare (€929 million).
  

FINANCING 

Consumer Services received the largest allocation of investment during 3Q 2015 (31%), accumulating €935 million through 103 deals. Deal flow rose by 5% from the prior quarter, despite a 33% drop in capital invested.
Healthcare placed second in terms of equity financing raising €929 million across 62 deals, an improvement of 101% in capital raised and 13% in deals completed from the previous quarter.
Business and Financial services placed third, with companies in the sector gathering 25% of the total amount invested for the quarter. The sector received €746 million across 112 deals; a rise of 12% in capital invested and of 8% in deal flow from 2Q 2015.

FINANCING

The United Kingdom was the most favoured destination for equity financing during 3Q 2015, receiving €947 million across 87 deals. The country took 31% of all equity financing for the quarter, despite a 9% decrease in deal flow from 2Q 2015.

France placed second, attracting a 19% share of European financing. Investment reached a total €567 million, a 29% rise in capital invested, despite a 22% drop in number of deals. 

Germany occupies third position raising €428 million, 14% of the total for the quarter. 

Switzerland placed fourth with a 6% share, raising €194 million during

LIQUIDITY 

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.
A total of €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.
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.

LIQUIDITY 

8 venture-backed IPOs took place during 3Q 2015, a decrease in number of deals both to the prior quarter and the previous year.

• •  IPOs raised almost €700 million during 3Q 2015, an increase of 31% from the €533 million raised in 2Q 2015. VC-backed companies also raised an higher amount through IPOs when compared with the year ago period (€447 million).
  
• •  The largest European VC-backed IPO of 3Q 2015
  was the Flow Traders listing in July. The company raised €521 million for its offering on the Amsterdam Exchange Index.
  

Berkery Noyes Information Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Information Industry.

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.

Total transaction volume rose five percent since second half 2014. Aggregate value was nearly flat at $112.63 billion. Of note, the peak for volume throughout the past two-and-a-half years occurred in first half 2015, whereas value reached its zenith in first half 2014. In terms of valuations, the median revenue and median EBITDA multiple over the past six months remained about constant at 2.3x and 11.6x, respectively. The industry’s largest transaction in first half 2015 was Permira and CPP Investment Board’s acquisition of Informatica, a provider of enterprise data integration software and services, for $4.77 billion.

Regarding the three horizontal markets covered in the report, the number of transactions in the Software horizontal experienced a three percent uptick. As for software used within specific vertical industries or “Niche Software,” volume increased 11 percent. Four of the horizontal’s top ten highest value deals year-to-date were located in the Niche segment. Two of these four acquisitions took place in the Capital Markets sector.

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.

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.

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.

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.

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.

“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.”

Berkery Noyes Healthcare/Pharma Information and Technology Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.

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.

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.

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.

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.

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.

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.

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.

“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.”

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.”

“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.”

Berkery Noyes: Financial Technology and Information Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Financial Technology and Information Industry.

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.

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.

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.

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.

“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.”

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.

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.

“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.”

Berkery Noyes: Media and Marketing Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Media and Marketing Industry. 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

“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.”

Berkery Noyes: Software Industry M&A Report For Half Year 2015

Berkery Noyes has released its half year 2015 mergers and acquisitions trend report for the Software Industry. 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

“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.”