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Berkery Noyes Releases 2010 Online Industry Merger & Acquisition Trends

Wednesday, January 05, 2011

Berkery Noyes, a leading middle market investment bank, has released its 2010 Online M&A Trends Report. This report analyzes merger and acquisition activity in the Online Industry in 2010 and compares it with activity in the three previous years.

Both total transaction volume and value saw marked increases this year. Total transaction volume increased by 63 percent from 679 in 2009 to 1108 in 2010 and total transaction value increased by 72 percent from $25.95 billion in 2009 to $44.61 billion in 2010.

SaaS/ASP was the most active market segment by volume in 2010. The online industry had been led by the E-Content segment until 2009, when it was edged out slightly by the SaaS/ASP segment. 2010 proved that this increased presence in online transactions was no anomaly, with SaaS/ASP representing roughly 20% more deals than its nearest segment competitor, E-Content.

Google was far and away the most active acquirer in the Online Industry, with 22 acquisitions in 2010. Last year, Google tied Thomson Reuters for the most active acquirer with 5 transactions.

"Google has really intensified their M&A activity in the last twelve months," said James Berkery, CIO of Berkery Noyes. "Their acquisitions covered a broad spectrum of technologies, from semantic search to image recognition, but they have primarily focused on the social and mobile areas, two markets where they're facing stiff competition."

Strategic acquirers continued to be the most common acquirer in 2010, yet financial acquirers increased by 36%. A more active financial acquirer in 2010 may be indicative of both firms' increasing willingness to enter investments and the gradual easing of the credit market.