Berkery Noyes, the leading independent investment bank specializing in the information content and technology industries, today released its Third Quarter 2011 Mergers and Acquisitions Update for the Software Industry.
The report analyzes merger and acquisition activity in the sector across the three-month period and compares it with similar activity for the six previous quarters.
According to Berkery Noyes research, third-quarter transaction volume in the Software Industry decreased 11 percent over the previous period. Transaction value, which increased 179 percent in the second quarter, fell 23 percent across the third quarter. So far in 2011, six of the top ten deals by value occurred in the year’s second quarter.
Median EBITDA multiples were nearly unchanged for the quarter at 13.6, as were revenue multiples at 2.3. By segment, the largest disclosed median revenue multiple was in Consumer Software at 4.3 times revenue, resulting from Augme Technologies’ acquisition of JAGTAG. In addition, Hewlett Packard’s acquisition of Autonomy Corporation represented a 10.8 revenue multiple and a 24.5 EBITDA multiple.
“While Hewlett Packard’s offer for Autonomy Corporation PLC highlighted the attractive e-discovery sector, there has been a long history of acquisitions at high transaction multiples in the sector,” said Berkery Noyes managing director Mary Jo Zandy. “This historical trend is expected to be accentuated in the next twenty-four months as the consolidation in the high growth e-discovery market continues. Many of the smaller privately-held companies, some with cloud technologies, are attractive acquisitions for the existing large players and potential new entries.”
For the quarter, Vista Equity Partners was the most active acquirer in the Software Industry, with acquisitions of Thomson Reuters Trade and Risk Management Business, Sage Healthcare, CompuLaw, Client Profiles, and CyberShift.
Berkery Noyes specializes in Mergers and Acquisitions advisory services, in addition to structuring debt and equity transactions in the $25 million to $500 million range. Unique among investment banking firms, the firm combines independent strategic research and industry intelligence with senior information technology banking expertise. Long having been an innovator in database and research technology in M&A, Berkery Noyes has committed itself to providing more expansive and more current information. The firm’s research teams publish acquisition activity in the respective sectors they follow on MandAsoft.com.
A copy of the THIRD QUARTER 2011 SOFTWARE INDUSTRY M&A UPDATE is available at the Berkery Noyes website.