Digital M&A Activity Up 12 Per Cent in 2015

David Murphy

King Candy Crush

Activision Blizzard’s $5.9bn acquisition of Candy Crush creator, King Digital Entertainment, was one of 2015's most notable deals

The online and mobile industry M&A (mergers & acquisitions) transaction volume increased 12 per cent on a year-to-year basis, according to independent mid-market investment bank Berkery Noyes’ end-of-year report.

The Consumer Mobile Application segment’s deal volume increased 3 per cent in 2015, representing a 10 per cent gain compared to 2013. One of the largest deals included Activision Blizzard’s acquisition of King Digital Entertainment, creator of Candy Crush Saga, for $5.9bn.

Aggregate deal value was 19 per cent up on 2014’s figure of $131.2bn, at $156.5bn. However, the median revenue multiple decreased from 2.4x to 2.2x, while the median EBITDA multiple fell from 13.1x to 10x.

The busiest sector was SaaS & Cloud which saw deal volumes increase 21 per cent in 2015 - the largest annual rise. The eCommerce segment’s deal volume increased 16 per cent in 2015. The most active player was Expedia which spent a total of $4.9bn on acquisitions, including HomeAway for $3.3bn, Orbitz Worldwide for $1.4bn, and for $280m.

Berkery Noyes expect to see more deals in the Internet of Things (IoT) space in 2016, after a busy 2015 that saw several deals completed by high profile acquirers, including included Cisco Systems’ acquisition of ParStream; IBM’s acquisition of StrongLoop; Autodesk’s acquisition of SeeControl; and Amazon’s acquisition of 2lemetry.

“Companies that can differentiate their offerings from the average digital- and mobile-based ad tech players are performing well,” said Berkery Noyes managing director, Vineet Asthana. “Potential acquirers include large telecommunications firms, traditional B2B media companies, and offline data providers that are looking for a digital platform. Furthermore, many advertising networks without programmatic technology capabilities want to expand their suite of solutions to help better automate their marketing campaigns.”

You can access the full report here.