2013 Middle Market M&A Data Trends and Outlook

The Private Company Financial Data Authority

2013 Middle Market M&A Data Trends and Outlook

Co-hosted by PrivCo Private Company Financial Intelligence and the AM&AA (Alliance of Mergers and Acquisition Advisors)

At Home of Sam Hamadeh, Founder and CEO of PrivCoNew York, NYMay 9th, 2013

PrivCo ContactsSam Hamadeh, Founder & CEO – [email protected] Pisarksi, VP of Corporate Clients – [email protected]

Major Corporate Clients Rely on PrivCo for Private Company Financial Data


PrivCo Data Cited In Thousands Of Media Outlets


Top SectorsQ1 2012 Q1 2013

1 Application Software Mobile Applications

2 Software Marketing Services

3 Networking/Storage Technology IT Services/Consulting

4 IT Services/Consulting Software-as-a-Service (SaaS)

5 Internet Services Insurance

Completed Deals

Q1 2012 Q1 2013 Change

2,003 1,256 -37.3%


Middle Market M&A Deal ActivityU.S.

Q1 2012 vs. Q1 2013

Middle Market M&A Deal ActivityNew York City Q1 2012 vs. Q1 2013

Completed DealsQ1 2012 Q1 2013 Change

77 42 -45.5%

Top Sectors

Q1 2012 Q1 2013

1 Internet Content Providers Mobile Applications

2 Social Media Marketing Services

3 Internet Services Advertising Agencies

4 Website Design & Hosting Prepaid debit cards/gift cards

5 Advertising Agencies Men’s Apparel

Sam Hamadeh, Founder & CEO – 917-701-1887Chris Pisarksi, VP of Corporate Clients – 518-256-7452


Key Current Middle Market Trend #1: Cheap Money Driving M&A

• Record low interest rates and the ability to tap the junk bond market have been conducive to M&A activity

• Easy borrowing has allowed companies in need of growth to expand through acquisition strategies

• Cheap money will increase buyer activity from private equity firms


Key Current Middle Market Trend #2: In-house Tech Teams

• It has become increasingly important to acquire and retain top tech talent within an organization

• Companies building in-house tech teams (Intel Capital, Google M&A, Twitter recently hiring Cynthia Gaylor, a Morgan Stanley M&A banker)

• Due to the over-abundance of startups in recent years, top engineering talents in the industry are becoming founders, not employees. As a result, engineers that companies can hire in the open market are no longer the best, resulting in an increase in “acq-hires”


Key Current Middle Market Trend #3: Rise of the “Acq-Hire”

"Acq-Hire" – An acquisition process whereby a corporate buyer acquires the target company for its top talents (usually its engineers). The use of the acq-hire is gaining more traction amongst private companies, and is trending up quarter over quarter. Q1 2013 saw a 91% jump in total companies acq-hired from Q1 2012.


Key Takeaways

• Middle market M&A activity in the U.S. in Q1 2013 totaled 1,256 deals, representing a 37% decrease from Q1 2012, wherein over 2,000 middle market M&A deals occurred. The top sectors for M&A deals in the U.S. changed drastically in Q1 2013, with Mobile Applications, Marketing Services, and IT Services companies replacing Software & Networking/Technology companies as the most targeted industries.

• Middle market M&A activity in New York City followed suit, with a 45% drop in completed deals. Q1 2013 deals totaled 42 compared to a total of 77 deals in Q1 2012. Top sectors in New York City M&A include Mobile Applications, Marketing Services, and Advertising Agencies compared to Internet Content Providers, Social Media companies and Internet Service companies in 2012.

• Key trends for middle market companies that are currently present in the industry include:• Cheap money driving M&A activity in the U.S.• The importance of building an in-house tech team• The rise of the “acq-hire” and its growing use as a means of acquiring top talent


Presented by PrivCo’s Founder and CEO, Sam Hamdeh, Esq., J.D., M.B.A.


Sam is an online information expert; he founded online job and career information leader Vault.com

Sam holds an MBA in Finance from Wharton and a JD from the University of Pennsylvania Law School

Sam has been recognized as one of the top entrepreneurs in America; to name just a few honors:

Crain’s NY Entrepreneur of the Year Silicon Alley Reporter’s 100 Top Internet Executives Deloitte Fast 500 Fastest Growing Technology Companies Harvard Business School Club of NY Entrepreneur of the Year Currently serves as Wharton’s official Entrepreneur-in-Residence

Full Bio: http://www.privco.com/our-team/founder-and-ceo

http://www.privco.com/our-team/founder-and-ceo

2013 Middle Market M&A Data Trends and Outlook

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