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Berkery Noyes Releases 2010 Software Industry Merger & Acquisition Trends

Wednesday, January 05, 2011

Berkery Noyes, a leading middle market investment bank, has released its 2010 Year Software M&A Trends Report. This report analyzes merger and acquisition activity in the Software Industry in 2010 and compares it with activity in the three previous years from 2007-2009.

Software saw a dramatic increase in both transaction volume and value in 2010. Total transaction volume increased by 37 percent from 819 in 2009 to 1121 in 2010. Total transaction value in 2010 increased by 103 percent from $38.29 billion in 2009 to $77.61 billion in 2010.

Median multiples and deal value also experienced an increase over 2009. The median revenue multiple rose to 1.8 in 2010 from 1.5 in 2009, the median EBITDA multiple rose from 10 in 2009 to 11.9 in 2010, and median deal value rose from $9.94 million in 2009 to $19 million in 2010.

"For the first time in the 10 years we have been tracking the software industry, ASP, SaaS, or Cloud technologies have represented nearly 50% of the acquired companies," said James Berkery, CIO of Berkery Noyes. "The 555 transactions tracked this year nearly double the previous year's total. We expect M&A activity to continue in this direction as companies follow the bandwidth curve."

Berkery Noyes has instituted a new system for the classification of software companies, creating four new market segments: Business, Consumer, Infrastructure, and Niche. Each distinct group helps to delineate the software companies tracked, providing a more accurate and detailed view of the industry.