Gridley &； Company M&；A Survey: Information Services Industry Favoring Private Company Acquisitions in a More Selective M&；A Environment

　　NEW YORK, Jan. 15 /PRNewswire/ -- A new mergers and acquisitions survey conducted by New York-based boutique investment bank Gridley & Company LLC reveals that more than half of the respondents -- composed of executives from various sectors of the information services industry-expect that the lending environment for M&A will become more selective toward quality deals. With this outlook in mind, 68 percent of respondents plan to acquire a private company over the next 12-18 months in the financial technology, marketing services or Internet services space. When thinking about a transaction, 52 percent of those surveyed stated they will be buyers, with another 28 percent expecting to be both a buyer and a seller, suggesting an active M&A market during this period.

    "In 2007, we saw the total number of deals in our sectors increase by 30 percent with spikes in public offerings in the Internet services and marketing services sectors. We''re encouraged that our respondents believe there is robust interest from both buyers and sellers in this space moving into 2008," said Linda Gridley, Founder and CEO of Gridley & Company LLC and host of Gridley''s Seventh Annual Information, Marketing, Payments, and Internet Services Conference being held today at the Jumeirah Essex House in New York. "We''ve also concluded that Internet services is clearly the hot spot for liquidity opportunities this year on the heels of a very active 2007. The challenge in this space increasingly will be deciding what to buy amidst a plethora of acquisition opportunities and minimal fall out from the credit crunch. In financial technology, sellers will have to work a bit harder for their premium sale price as buyers become more scarce and cautious in 2008 and financial security gets hit by a tougher bank environment. Meanwhile in marketing services, we expect more moderate activity as companies face a tougher ad spending environment."

    Survey participants also responded to questions regarding deal volume, multiples and transaction amounts. For example, 59 percent of private equity investor respondents viewed their "sweet spot" as six to 10 times 2007 EBITDA. Other key findings from the survey, broken out by information services sub- sector, include:

    Marketing Services -- Sixty-nine percent of marketing services respondents said they think they may be involved in a transaction valued at less than $50 million, while only two percent believe they would do a deal larger than $1 billion. -- Fifty-two percent of marketing services company executives think current transaction multiples are fair, while another 40 percent feel multiples are high. -- The majority of marketing services respondents expect 2008 domestic deal volume to decrease compared to 2007, a record year for transactions. Forty percent predict that volume will drop 15 percent or less and another 17 percent foresee a decrease of more than 15 percent. -- When asked if the credit crunch changed their M&A outlook, 49 percent of marketing services company executives responded that they expect fewer deals than previously anticipated due to this situation. Internet Services -- Seventy-five percent of Internet service respondents said they think they may be involved in a transaction valued at less than $100 million, while none believe they would do a deal larger than $250 million. -- Internet services company executives were split in their opinions about current transaction multiples with 50 percent responding that they are fair, and the other 50 percent responding that they are high. -- The majority of Internet services respondents expect 2008 domestic deal volume to decrease compared to 2007, with 38 percent predicting volume to drop 15 percent or less and another 25 percent foreseeing a decrease of more than 15 percent. -- Internet services company executives are unscathed about the credit crunch though, with 75 percent responding that their M&A outlook remains the same. Financial Technology -- Eighty-two percent of financial technology respondents said they think they may be involved in a transaction valued at less than $250 million, while less than 10 percent believe they would do a deal larger than $500 million. -- A slight majority (53 percent) of financial technology company executives think current transaction multiples are high, while the other 47 percent feel multiples are fair. -- Thirty-four percent of financial technology respondents expect 2008 domestic deal volume to drop 15 percent or less, while another 28 percent posit that deal volume will match volume in 2007. -- When asked if the credit crunch changed their M&A outlook, 41 percent of financial technology company executives responded that they expect fewer deals than previously anticipated, while another 38 percent noted that their outlook remained the same.

    Gridley''s M&A survey was designed to gain insight into deal activity and trends in the information services industry, and assess the outlook for the sector over the next 12-18 months. Survey respondents were composed of approximately 100 senior information services industry executives.

    Gridley''s Seventh Annual Information, Marketing, Payments, and Internet Services Conference will feature presentations from approximately 40 of the hottest private companies in the information services sector as well as discussion panels from industry leaders. Over the past three conferences, 55% of presenters have gone on to do a liquidity event. This year''s conference has drawn attendance from over 375 senior executives and financial investors representing approximately 275 companies.

    About Gridley & Company LLC

    Gridley & Company is a New York based boutique investment bank that provides financial advisory services to companies in the Information Services industry with a specific focus on the following sectors: Financial Technology; Marketing Services; Data Services; Outsourcing Services and Internet Services. Industry professionals rely on and look to Gridley for insights on M&A through proprietary annual events and its semi-annual newsletter, The Compass, which is received by over 1,500 industry professionals. Gridley''s knowledge-based investment banking approach combined with its specialized expertise in information services results in optimal advice for clients and highly successful transactions. For more information, please visit www.gridleyco.com.

    Source: Gridley & Company LLC