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Berkery Noyes Releases Online and Mobile Industry M&A Report For First Quarter 2016

Tuesday, April 12, 2016

NEW YORK — April 12, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its Q1 2016 mergers and acquisitions trend report for the Online and Mobile Industry. The report analyzes M&A activity in the Online and Mobile Industry during Q1 2016 and compares it with the past four quarters.

According to Berkery Noyes’ research, deal volume increased 12 percent in over the past three months. Total transaction value declined 29 percent, from $48.5 billion to $34.5 billion. Five of the industry’s top ten highest value acquisitions last year occurred in Q4 2015. When compared to the same time period in 2015, value in Q1 2016 rose 26 percent. Also of note, five of the industry’s top ten largest transactions in Q1 2016 were based outside of the U.S.

Two of the industry’s top five highest value deals in Q1 2016 were Capital Markets related. Along these lines were IHS’ announced merger with Markit Group, a global provider of financial information services, for $11 billion; and Nasdaq’s announced acquisition of The International Securities Exchange, an operator of three electronic options exchanges, from Deutsche Börse Group for $1.1 billion.

The number of transactions in the mobile application subsector increased 35 percent on a quarterly basis, from 88 to 119. High profile mobile-based deals during Q1 2016 included Microsoft’s announced acquisition of Swiftkey, which provides predictive keyboard technology for Android and iOS devices, with a reported purchase price of approximately $250 million; Gopro’s announced acquisition of video editing apps Replay and Splice for $105 million; and Spotify’s acquisitions of Soundwave and Cord Project, as the digital music service looks to bolster its social and messaging capabilities. Other notable acquirers were Snapchat with the announced acquisition of Bitstrips, which allows users to create personalized emojis and carton avatars, for a reported $100 million; and Facebook with the announced acquisition of Masquerade, a face swapping application.

E-Commerce deal activity remained constant in Q1 2016. This followed a 14 percent rise in Q4 2015. Notable E-Commerce transactions year-to-date included Hudson’s Bay Company’s acquisition of Gilt Groupe, an online retailer that offers luxury flash sales, for $250 million; Just Eat’s acquisition of four online food businesses from Rocket Internet and foodpanda, for $139 million; Blackhawk Network’s acquisitions of Giftcards.com, which sells digital and physical prepaid gift cards to consumers, for $120 million; and Nimble Commerce, a distribution network for digital promotions.

E-Marketing & Search volume improved 19 percent in Q1 2016, which reversed a downward trend during the two preceding quarters. Notable digital marketing deals thus far in 2016 included Telenor’s announced acquisition of Tapad, a marketing technology firm that provides cross-device content delivery solutions, for $360 million; Oracle’s announced acquisition of AddThis, a web tracking and data analytics company, for $175 million; RNTS Media’s announced acquisition of Inneractive, a mobile real-time bidding advertising exchange, for $46 million; Mobvista’s announced acquisition of nativeX, a mobile advertising company focused on the gaming market, for $25 million; and YouTube’s acquisition of BandPage, an online music platform used by musicians to promote their music on Facebook. Regarding high profile active acquirers in the segment, IBM acquired digital agencies ecx.io, Aperto, and Resource/Ammirati.

As for other markets covered in the report, SaaS & Cloud volume gained 20 percent in Q1 2016. It continued to be the most active Online & Mobile sector, representing 30 percent of the industry’s aggregate volume year-to-date. E-Content deal activity experienced a 24 percent quarterly rise. M&A volume in the Communications decreased ten percent. 

According to Vineet Asthana, Managing Director at Berkery Noyes, “There has been a heightened emphasis in several areas, for instance marketing automation, real-time bidding and programmatic technology. Meanwhile, some digital publishers have not yet fully embraced ad tech as they wait for specific concerns to be addressed. One example is the inability to control the ads that appear on their sites and how the data is shared when partnering with certain third party vendors. Others worry about slower website loading times and a diminished user experience. Asthana continued, “This does not mean that these publishers are adverse to embracing technology. On the contrary, they are often acquiring or building products and tools to distribute branded content while maintaining a heavy focus on analytics.”

A copy of the ONLINE AND MOBILE M&A REPORT FOR FIRST QUARTER 2016 is available at the Berkery Noyes website.



 

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