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Berkery Noyes reviews half-yearly 2010 Software Industry's M&A trends

04 July 2010 , Written by Dhruv Tanwar
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Middle market investment bank Berkery Noyes has brought out its round up of the software industry's merger and acquisition (M&A) trends during the first half of 2010, with a pronounced trend being the orientation towards going mobile.

NY30521EBITDA multiples in the Software industry experienced a 30% half-to-half increase from 11.3 in second half of 2009 to 14.7 in first half of 2010, marking a 42% increase from the low of 8.5 in first half of 2009. The sector saw a 24% increase in volume, Berkery Noyes said, exceeding the total volume of each of the four preceding sixth month periods.  

Consumer applications saw a 94% jump in volume from second half of 2009, indicating a market eager to attract end users with innovation.

The proliferation of smartphones, in particular those with application oriented operating systems, have helped drive mobile application software to rise 79% from the past half year, from 31 to 59, Berkery Noyes said.  This is a sharp rise as opposed to the modest growth of 27% from first half of 2009 to the second half and of 24% from second half of 2008 to first half of 2009.

Of the top ten deals, four companies being acquired have been in business since 1995.  The sale of Cybersource Corporation, Sybase Inc., Palm Inc., and the exit of Verisign, Inc. from its main authentication business marks the consolidation of once-prominent software industry brands. Online transactions within the Software Industry increased, rising to 43% of the total software market in forst half of 2010.  The rise was driven mostly by the strength of Cloud Computing, SaaS, Mobile, and Internet Enabling Applications, the company said.

Google, Inc. was ranked the most active buyer within the Software Industry, with nine transactions, acquiring technologies from social network search engines to online document editing.
 

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