Information industry mergers, acquisitions up 36% in 2010

Search giant Google remains busiest dealmaker, buying 28 companies last year

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A new report on merger and acquisition activity in the information industry shows a 36 percent increase in both transaction volume and value in 2010.

There were more than 2,000 transactions last year (2,046, to be exact), according to the 2010 Information M&A Trends Report published by middle-market investment bank Berkery Noyes. That's the highest activity volume in the information industry since the bank began tracking deals in 2000.

The total value of the transactions was $112 billion, with the revenue multiple climbing to 1.8 and the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) multiple rising to 11.2, a 29 percent gain over 2009.

In a statement accompanying the report, Berkery Noyes CIO James Berkery said, “Multiples have started to make a return to pre-crisis levels. There are more deals happening and there are higher valuations. While we’re not at the levels we saw in 2007, I think we’re well on the road to recovery.”

That would be nice.

Report highlights:

* Last year's largest transaction by dollar value was chip maker Intel's (NASDAQ: INTC) announced acquisition of security vendor McAfee for $7.55 billion in August. Runner-up was SAP's (NYSE: SAP) acquisition of enterprise software and services provider Sybase for $5.65 billion in May.

* Google (NASDAQ: GOOG) continues to be the most active buyer in the information industry, logging 28 acquisitions in 2010. The search giant also was the busiest acquirer from 2007 through 2010, with 48 deals under its belt. (Last year's biggest acquisition for Google was online travel technology vendor ITA Software for $700 million in July. However, that deal is being opposed by FairSearch.org, a coalition of online travel industry competitors, and is under review by the U.S. Department of Justice.)

* The largest transaction from 2007 through 2010 was Thomson Corporation’s merger with news service Reuters for $17.58 billion, completed in April 2008 and resulting in the creation of Thomson Reuters (NYSE: TRI).

* While Google had the most deals in that time period, database software giant Oracle (NASDAQ: ORCL) logged the highest aggregate acquisition value, spending $20.48 billion. (Two major Oracle acquisitions were middleware software vendor BEA Systems for $8.5 billion in 2008 and Sun Microsystems for $7.4 billion early last year.)

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks.

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