October extended a year of booming IT M&A deals, with familiar advisors doing some of the biggest deals, as well as at least one second-year firm.
M&A activity in the industry grew 20.6% year-over-year in October with 252 deals recorded by S&P Global Market Intelligence. The jump in activity is notable as M&A activity returned to normal in October 2020 after a decline linked to the pandemic. The 209 transactions recorded a year ago were 0.5% higher than the same month in 2019, itself a healthy year for IT transaction activity.
The boom year saw some of the country’s familiar financial advisers take advantage of the white-hot market, and October was no exception. The month’s biggest deals saw JPMorgan Chase & Co., The Goldman Sachs Group Inc. and Evercore Inc. help arbitrate the terms.
However, some small businesses have also gained ground in 2021 against some of the bigger names. Store advisor Qatalyst Partners LP, for example, has maintained strong momentum in the rankings of information technology deals against the nation’s mega-banks. The company consulted the seller on the industry’s fourth-largest deal in October, the $ 1.05 billion acquisition of Lucid Holdings LLC by Cint Group AB (publ), a consolidation of data and information companies on the supply chain.
Advisors from Centerview Partners LLC returned in October to consult on the two biggest deals of the month: Emerson Electric Co.’s 55% acquisition of $ 6.34 billion of the industrial asset optimization firm. Aspen Technology Inc. and Zendesk Inc.’s $ 4.78 billion acquisition of another poll. and commentary company Momentive Global Inc.
Centerview will consult with the buyer on both transactions, and on both transactions, it will partner with Goldman Sachs. The seller in both transactions will be represented by JP Morgan. Allen & Company Inc. will join JP Morgan under the Zendesk Agreement.
The Zendesk transaction specifically highlights a flourishing trend in the IT industry, according to 451 Research. As more businesses compete online, customer experience and business optimization are increasingly important.
While Zendesk already offers customer management solutions, the addition of Momentive, the parent company of GetFeedback and SurveyMonkey, will expand Zendesk’s stack to include a broader range of feedback tools and options for feedback. reply. These types of service technology investments are on the rise after COVID-19, and acquirers are paying a premium to expand their reach into the space. Zendesk paid 10.9 times Momentive’s 2020 revenue for the company.
October also saw a new face among top IT transaction advisers as LUMA Partners LLC advised on a transaction between Twitter Inc. and new public company AppLovin Corp., which provides marketing and consulting services. monetization to digital application developers.
As part of the transaction, AppLovin will acquire digital advertising and mobile transaction service MoPub Inc. from Twitter for $ 1.05 billion in the fifth largest information technology transaction of the month. LUMA will consult with AppLovin on the agreement.
LUMA has only been taking transaction clients since 2011, according to S&P Capital IQ, and the MoPub transaction will be its second largest M&A transaction advised to date. The largest merger and acquisition transaction for LUMA to date is the acquisition of SpotX by Magnite Inc. for $ 1.14 billion, which closed in April. LUMA is the only financial advisor listed on the MoPub agreement.
Outside of M&A deals, LUMA has worked with AppLovin once before, on its $ 2.0 billion IPO in March. AppLovin shares have gained around 32% since the opening of its IPO, outperforming the S&P US BMI Information Technology Index, which has risen around 17% during that time period.
The largest capital offering LUMA has ever participated in was the $ 3.4 billion IPO of Snap Inc. in 2017.
The company markets itself as a digital media and marketing focused investment bank with offices in New York City and Palo Alto, California, and has worked with 27 clients since 2011.
AppLovin’s acquisition of MoPub will add auction technology from MoPub and expand its potential customer base, according to 451. The company depends on the sale of advertising inventory on a large scale, and the addition of MoPub will potentially increase its demand pool. at a time when AppLovin is expanding its inventory with a skip to the game.
The deal is valued at 5.6 times MoPub’s 2020 revenue, according to 451, which is modest for the IT industry in 2021, but also comes at a time when merger prices and Technology acquisitions retreat from mid-year highs.
451 Research is part of S&P Global Market Intelligence.