warning message
Name Password:  
search
 
 

Berkery Noyes Releases Private Equity in the Information Industry M&A Report For Half Year 2016

Monday, July 25, 2016

NEW YORK — July 25, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2016 mergers and acquisitions trend report for Private Equity in the Information Industry.

The report analyzes M&A in the private equity market for the first half of 2016 and compares it with activity in the four previous six-month periods from 2014 to 2015. It features transactions completed by financially sponsored acquirers within the Information Industry, including purchases through subsidiaries or platforms of private equity firms. The Information Industry is defined here as being comprised of companies in either the Media & Marketing, Software, or Online & Mobile sectors.

Sponsored deal volume increased ten percent on a half year basis. Total value fell from $38.42 billion to $20.81 billion, a 46 percent decline. The peak for private equity volume during the past two-and-a-half years occurred in first half 2016, whereas value reached its zenith in second half 2015.

Regarding the horizontal Software market, private equity volume gained 26 percent over the past six months. Sponsored deals accounted for 35 percent of the horizontal’s aggregate value in first half 2016, compared to 23 percent in second half 2015. 

The Information Industry’s largest private equity transaction in first half 2016 was Thoma Bravo’s announced acquisition of Qlik Technologies, a provider of business intelligence software and data visualization tools, for $2.58 billion. Thoma Bravo completed another notable transaction in the segment during this period with the acquisition of Infogix, which offers data analysis of business operations to enterprises in a variety of verticals such as financial services and healthcare.

Meanwhile, Vista Equity Partners was responsible for two of the Information Industry’s three highest value sponsored transactions year-to-date. Both of these deals, which involved cloud-based software targets, surpassed the $1 billion threshold. Vista Equity announced its acquisition of Marketo, an automated marketing software company, for $1.62 billion; and Cvent, a cloud-based enterprise event management business, for $1.34 billion.

In terms of specific verticals, private equity volume in the Healthcare market stayed nearly the same. Upon examination of value, two of the Information Industry’s top three overall Healthcare transactions in first half 2016 were backed by financial sponsors. 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; and Veritas Capital Partners’ announced acquisition of Verisk Health, a data services and analytics company, for $820 million.

Sponsored deal volume in the industry’s Finance vertical increased 14 percent on a half year basis. However, strategic acquirers were responsible for nine of the overall vertical’s top ten largest transactions year-to-date. The only private equity backed deal in the vertical’s top ten list during first half 2016 was GTCR’s acquisition of Optimal Blue, a cloud-based technology provider that offers enterprise lending services to mortgage originators and investors, for $350 million.

As for the industry’s Education vertical, private equity deal flow remained about constant, compared to a 22 percent decline in strategic volume. Vista Equity Partners was the most active Education acquirer with five transactions in the space year-to-date, which includes those either purchased directly or through an affiliated business.

This consisted of HAIKU Learning Systems, a cloud-based learning management system; TIENET, a software suite designed to help schools manage instructional, assessment and other educational services for special needs students; and Interactive Achievement, an instructional assessment software and analytical solutions company that serves school districts, each of which were acquired through PowerSchool Group; TeacherMatch, a provider of cloud-based recruitment, screening, professional development, and workforce planning solutions for K-12 school districts, which was acquired through PeopleAdmin; and JumpForward, a recruiting and compliance software solutions company used by collegiate athletic departments, which was acquired through Active Network.

“The swelling ranks of private equity firms are competing successfully with strategic buyers,” said James Berkery, Chief Information Officer at Berkery Noyes. “Financial sponsors, especially in the lower middle-market, are actively seeking add-ons to their current portfolios and platforms.” Berkery continued, “Based on the conversations we’ve been having, certain private equity investors are also looking to hold their portfolio companies for shorter intervals, sometimes less than the three to five year horizon that has traditionally been more commonplace.”

A copy of the PRIVATE EQUITY IN THE INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2016 is available at the Berkery Noyes website.