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Berkery Noyes Releases First Half 2012 M&A Report For the Online and Mobile Industry

Friday, July 06, 2012

NEW YORK — July 6, 2012 — Berkery Noyes, an independent mid-market investment bank, today released its first half 2012 mergers and acquisitions trend report for the Online and Mobile Industry.

The report analyzes merger and acquisition activity in the Online and Mobile Industry for the first half of 2012 and compares it with activity in the four previous six-month periods from 2010 to 2011.

According to Berkery Noyes’ research, transaction volume increased three percent during the last six months, from 939 to 970. Transaction value improved 20 percent, rising from $28.38 billion in second half 2011 to $34.12 billion in first half 2012. Likewise, the median value increased for the second consecutive half year. Although SaaS/ASP was the largest segment with 250 transactions, E-Commerce was the fastest growing segment throughout the last 12 months.

The median revenue multiple in the Online & Mobile Industry remained nearly constant in first half 2012, moving slightly from 2.5x to 2.4x. However, the median EBITDA multiple increased from 11.4x to 12.7x.

M&A volume in social media marketing, examined as a subset of the E-Marketing & Search segment, increased fourfold compared to first half 2011 and 30 percent relative to the prior half year period. This included some high value deals in first half 2012. For example, Salesforce.com announced its acquisition of Buddy Media for $745 million and Oracle announced its acquisition of Vitrue for $300 million. Salesforce.com acquired Radian6 Technologies more than a year ago, which is used for social media monitoring and engagement. Buddy Media will be combined with Radian6 to solidify Salesforce’s comprehensive marketing cloud. Regarding other notable social enterprise transactions in first half 2012, Microsoft announced its acquisition of Yammer for $1.2 billion, Salesforce.com acquired Thinkfuse and ChoicePass, and Oracle acquired Collective Intellect.

According to Berkery Noyes Managing Director Mary Jo Zandy, “companies committed to customer relationship management (CRM) appear keen on integrating social media with their existing marketing platforms by acquiring startups. The traditional CRM model is being replaced by a more interactive process in which businesses aim to listen to what their consumers are saying in real time.”

Large Online & Mobile companies – notably Groupon, Facebook, and Google – were active acquirers in first half 2012. Of these three, Groupon was the most acquisitive with eight transactions. Facebook was close behind with seven acquisitions, whereas Google had five. Facebook’s strategic focus, excluding Face.com, has been on mobile companies as of late. Following its initial public offering (IPO), there continues to be much discussion about the social network needing to generate further revenue from its mobile advertising offerings. Facebook has responded to a perceived vulnerability in this area by acquiring Karma Science, Glancee, Tagtile, and Instagram as well as the mobile development teams from Pieceable Software and Lightbox.

A copy of the FIRST HALF 2012 M&A REPORT FOR THE ONLINE AND MOBILE INDUSTRY is available at the Berkery Noyes website.