Full Year 2010 Private Equity, Information Industry Trends

2010 Key Highlights

• The largest transaction in 2010 was the acquisition of Interactive Data Corporation, a subsidiary of Pearson plc, by Warburg Pincus and Silver Lake Partners for $3.25 billion.
• Thoma Bravo was the most active financial acquirer in the information industry by volume, with 10 acquisitions: UPS Logistics Technologies, Computer Systems Company, Inc., Hershey Systems, Inc., LANDesk Software, Inc., Beyond Appraisal, Inc., SonicWALL, Inc., Double-Take Software, ManageSoft Corporation, PLATO Learning, Inc. and eWebHealth.

2010 Key Trends

• Total transaction volume in 2010 increased by 24 percent over 2009 from 222 in 2009 to 275 in 2010.
• Total transaction value in 2010 increased by 57 percent over 2009 from $16.21 billion in 2009 to $25.45 billion in 2010.
• The median revenue multiple increased 53 percent over 2009, from 1.3 to 2.0 in 2010.

M&A Market Overview

Berkery Noyes tracked 1048 transactions between 2007 and 2010 of which 359 disclosed financial terms, and calculated the aggregate transaction value to be $120.83 billion. Based on known transaction values, we project values of 689 undisclosed transactions to be $28.85 billion totaling $149.68 billion worth of financially sponsored transactions within the information industry tracked over the past four years.

Large, active financial buyers have focused their acquisitions on adding to existing portfolio companies rather than the acquisition of new, stand alone investments. Over 80 percent of their transactions have been incorporated into existing investments, where across the acquisition landscape in the information industry, the number has been closer to 60 percent.

Berkery Noyes determined that the nearly one-third of companies sold between 2007 and 2010 received transaction values between $12 million to $90 million.