Berkery Noyes Releases 2011 Year End Software Industry Mergers and Acquisitions Trend Report

NEW YORK, Jan. 9, 2012 /PRNewswire/ -- Berkery Noyes, an independent middle market investment bank, today released its 2011 Full Year Mergers and Acquisitions Trend Report for the Software Industry. The report analyzes the sector for 2011 and compares it with similar activity in 2009 and 2010.

Full Year transaction value saw a gain of 6 percent over the last twelve months, from $76.42 billion to $80.75 billion. The segment with the largest increase in value, Consumer Software, was primarily due to Microsoft's acquisition of Skype for $9.08 billion. Full Year volume increased 6 percent, from 1313 to 1450 transactions.

Median revenue and EBITDA multiples experienced an increase over the last year as well. The median revenue multiple rose from 1.8x to 2.2x, while the median EBITDA multiple increased from 11.2x to 13.3x.

As measured by transaction volume, activity in the mobile app segment has grown more than 60% since 2010. Deal volume increased from 26 in 2009 to 49 in 2010, and to 79 announced transactions in 2011. The growth in 2011 was driven primarily by increased interest in non-game app developers, which accounted for 29 out of 79 transactions (37%). These companies develop applications that utilize device-specific features such as camera or GPS. For example, Sceptre Ventures acquired AdFlexer Innovations, a developer of an app which leverages image recognition technology to analyze images taken of yellow page ads, to search for and store in the device the company's contact information and the details of any special offers.

Out of the 79 announced transactions in 2011, 16 (20%) were mobile gaming developers. Despite losing volume share to non-game app developers, the mobile gaming space continued to see larger deal prices, including $104 million paid by OpenFeint for Japanese mobile social gaming company GREE International, Inc. and $71 million paid for mobile social gaming company Scoreloop, Inc. by Research In Motion (RIM). The median deal size in the mobile app segment was $4 million in 2011.

Google, Facebook and RIM continue to be activity leaders in the mobile app space, with four transactions each, as they look to expand their smartphone offerings. 

In addition, cloud computing continues to grow in importance. "Companies involved with cloud computing and SaaS are showing strong levels of M&A activity," said managing director Christopher Young of Berkery Noyes. "Going into 2012, more businesses will seek to convert from owning and maintaining licensed software to utilizing subscription based cloud solutions. Two of the largest Software deals in 2011, SAP's acquisition of SuccessFactors and Oracle's acquisition of RightNow Technologies, demonstrate an ongoing interest of integrating enterprise applications with cloud."

Berkery Noyes specializes in mergers and acquisitions and financial consulting services for companies in the $25 million to $500 million range, a market that is enjoying a surge in activity. Unique among investment banking firms, Berkery Noyes combines independent strategic research and industry intelligence with senior information 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 current information. The firm's research teams publish acquisition activity in the respective sectors they follow on MandAsoft.com.

A copy of the FULL YEAR 2011 SOFTWARE INDUSTRY M&A TREND REPORT is available at the Berkery Noyes website.

About Berkery Noyes

Berkery Noyes is an independent investment banking advisory firm servicing the information industry. Focused on middle-market corporations and financial sponsors, Berkery Noyes is committed to delivering a comprehensive array of industry-leading advisory services. Since its founding by Joseph W. Berkery in 1983, the firm has worked with corporate clients to grow through acquisition, divest non-core assets, and maximize shareholder returns through strategic transactions and restructurings. For private owners, Berkery Noyes helps create liquidity and execute timely exit strategies that achieve their personal and professional objectives. For more information, visit www.berkerynoyes.com.

­­­Contact Information:
Peter Wilson
Berkery Noyes Communications
646-442-7966
[email protected]

SOURCE Berkery Noyes