Mergers and Acquisitions in the Internet Software and Services Industry

NEW YORK, Dec. 30, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Mergers and Acquisitions in the Internet Software and Services Industry
http://www.reportlinker.com/p01921035/Mergers-and-Acquisitions-in-the-Internet-Software-and-Services-Industry.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Investment_Banking

Firms in the Online Services Segment are Attracting Premium Valuation Multiples

This study analyses the merger and acquisition transactions in the global Internet software and services industry from the period January 2007 to July 2013. The segments covered includes the internet and catalogue retail market, internet software segment, and online services segment. The study begins with an analysis of the overall macro-economic situation and its impact on M&A. This is followed by analysis of M&A transactions which includes deal volume and value analysis by regions, by segments, and from the perspective of the acquirer as well as target firms. The study also analyses deal valuation multiples, the type of integration, and concludes with an outlook.

Executive Summary

•Deal activity in Europe has recovered to pre-recession levels. However, in comparison with North America and Asia-Pacific, growth in deal volume has been lessened by macro-economic uncertainty.
•Mergers and acquisitions (M&As) continue to be used as a competitive tool by technology market participants to outsmart rivals, especially in the online services segment.
•M&As in the Internet and catalogue retail segment are driven by firms from other industries, as is indicated by a higher proportion of unrelated diversification acquisitions.
•M&As in the Internet and catalogue retail segment have been characterized by lower deal multiples with enterprise value (EV)/revenue range at a ratio of less than X.
•In the Internet software segment, content management solutions and analytics solutions have been key historical areas for M&As.
•Deal valuation multiples for firms in the Internet software segment have been better than for firms in the Internet and catalogue retail segment. A majority of the firms have been valued between X and X times their EV to revenues.
•Deal values in the online services segment declined steeply due to the recession in 2008. Subsequently, the focus has shifted from billion dollar deals to the acquisition of start-ups. As a result, there has been an increase in deal volume during the course of the study period.
•Trends indicate that, within the online services segments, firms that manage to gain traction and increase revenue to reach at least $X million are able to command better valuation multiples. During the course of the study period, more than X% of the target firms with revenue of less than $X million were acquired at less than X times the EV/revenue range. However, for firms with revenue between $X million and $Xmillion, the EV/revenue ratio has predominantly been between X and X.

Research Objective and Scope

Research Objective
This research service analyzes the M&A transactions in the global Internet software and services industry from January 2007 to July 2013. Deals are analyzed by segments and geographies. Cross-border deals are also analyzed. The outlook for M&A is also provided.

Geographic Scope
•Global

Analysis includes
•Across Segments
•Across Geographies
•Valuation Multiples
•Type of Buyers

Study Period
•January 2007 to July 2013

Transactions Analyzed
•Transactions

Sources
•Frost & Sullivan's in-house research expertise
•Established business and financial databases, such as Capital IQ
•Company annual reports
•Published news
•Press releases

Note: Financial data used for analysis is current as of 07 August 2013.
The analysis of transactions is based on data available from our secondary sources. For a variety of reasons (including confidentiality) all details of all transactions are not available. For instance, some acquisitions might have not disclosed the deal value or made an acquisition without revealing the geographic region of acquisition. Hence, the aggregates across sections might not match. Care has been taken to ensure mathematical and statistical accuracy while computing averages and ratios.

Who Will Benefit?
•Companies operating in the global Internet software and services industry
•Private equity firms
•Venture capital investors
•Fund managers
•Retail investors
•Sovereign wealth funds
•Hedge funds
•Insurance funds and other members of the investing community

Sectors Covered in the Study

Internet and Catalogue Retail Segment
M&A transactions involving companies that provide retail services primarily through the Internet, including online specialty retail

Internet Software Segment
M&A transactions involving companies that offer software and related applications that work on the Internet, including Voice over Internet Protocol (VoIP) software ad website infrastructure software

Online Services Segment
M&A transactions involving companies that offer services provided through the Internet, including application hosting services and online communities

Table of Contents

1. Executive Summary
2. Research Objective and Scope
3. Global Trends in M&A
4. Market Trends in Internet Software and Services
5. Merger and Acquisition in the Internet Software and Services industry—Historical Trends and Analysis
6. Internet and Catalogue Retail Segment Breakdown
7. Internet Software Segment Breakdown
8. Online Services Segment Breakdown
9. Conclusion
10. The Frost & Sullivan Story

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