Report: Info Industry M&A Activity Up 17% In Q3

Nov 10 2011 | 6:50am ET

Merger and acquisition activity in the information sector (media, software and online companies) was up 17% quarter on quarter in Q3 2011, reaching 108 transactions, according to a new report from investment bank Berkery Noyes.

The report, Third Quarter 2011 Mergers and Acquisitions Update for Private Equity in the Information Industry, tracks transactions made by financially sponsored acquirers within the information industry, including acquisitions made by subsidiaries or platforms of private equity firms.
 
The value of M&A transactions during Q3 was down 3.5% quarter on quarter, from $8.5 billion to $8.2 billion.

Boston-based private equity firm Thomas H. Lee Partners was the most active acquirer in Q3 2011, with 13 acquisitions—including three in the third quarter (Collaborative Fusion, Syndicated Methods and the telecommunications business of PivotPoint Solutions).

Two of the largest announced transactions YTD in 2011 were recorded in Q3: one was Kohlberg Kravis Roberts & Co. and Silver Lake Partners’ acquisition of GoDaddy.com for $2.25 billion; the other was Providence Equity Partners’ acquisition of Blackboard. Together, these two acquisitions had an aggregate value of $3.96 billion, representing 18% of total transaction value in the first three quarters and 48% of total Q3 transaction value.

Median EBITDA multiples jumped 3% from 2010 to the first nine months of 2011, from 10.7 to 11.0. Median revenue multiples, on the other hand, remained flat year on year at 1.8.
 
“Notably, two of Thomas H. Lee Partners’ third quarter transactions were related to healthcare. Ignite Health, whose ultimate parent is THL, and Intermedix, which is a consumer and healthcare subsidiary of THL, both made acquisitions. Private equity activity in healthcare technology is likely to be strong going into the near future, as evidenced by Blackstone’s acquisition of Emdeon and Vista Equity Partners’ acquisition of Sage Software in the third quarter,” said Berkery Noyes managing director Tom O’Connor.
 
Berkery Noyes specializes in M&A advisory services to the information industry, in addition to structuring debt and equity transactions in the $25 million to $500 million range.


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