1. Market Research
  2. > Software Market Trends

Mergers and Acquisitions in the Internet Software and Services Industry

  • November 2013
  • 63 pages
  • Frost & Sullivan
Report ID: 1921035

Summary

Table of Contents

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

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 60 Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

Veronica helps you find the right report:

Testimonials

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at
Ikea

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at
Ingredion

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

Purchase Reports From Reputable Market Research Publishers

Exploration & Production Software Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024

  • $ 7500
  • Industry report
  • February 2017
  • by Transparency Market Research

Global Exploration and Production Software Market: Overview The report provides analysis of the Exploration & Production (E&P) Software market for the period 2014–2024, wherein the years from 2016 to ...

Enterprise WLAN Market by Component, Hardware (Wireless access points, AP Antennas, Wireless LAN controllers, Multigigabit Switching, Wireless Location Appliance), Software, Service, Vertical, and Region - Global Forecast to 2021

  • $ 7150
  • Industry report
  • April 2017
  • by MarketsandMarkets

WLAN hardware to play a significant role in augmenting the growth prospects in the enterprise WLAN market This study has been done on a global level covering five regions broadly, North America, Europe, ...

Medical Image Analysis Software Market - Global Industry Analysis, Size, Share, Volume, Growth, Trends, and Forecast 2016 - 2024

  • $ 5795
  • Industry report
  • March 2017
  • by Transparency Market Research

Medical Image Analysis Software Market (Software Type - Integrated Software and Standalone Software; Imaging Type - 2D Imaging, 3D Imaging, and 4D Imaging; Modality - CT, MRI, PET, SPECT, Ultrasound, and ...

Top 10 Security Technologies

February 2017 $ 5650

ref:plp2013

Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.