1、1|10 Digital Commerce M&A Overview 1H 20232022:Back to(new)normal?Waking-up from a pandemic-induced highAs seen in the M&A activity during the pandemic yearsof 2020 and 2021,the Digital Commerce sector wasflying high.From one day to the other,COVID caused amassive acceleration of digitalisation in t

2、he industryand society.However,in 2022,we saw a decline innumberoftransactions.Politicalandeconomicuncertaintieshaveaffectedinvestormoodstheprivate and VC sectors have seen a massive decline indealsoverthepastyear,ashavepubliclylistedcompanies.The Global Online Retail(GLORE50)index below clearly ill

3、ustrates this development.Since the pandemic high in 2021,the global index share price has dropped by whopping-51%.The deal activity in the private sector,on the other hand,by-9%.That said,for M&A in Digital Commerce business public markets are currently not the right proxy and therefore not directl

4、y comparable or relevant for the markets transaction volume.We see the Digital Commerce M&A market as a stable,mature,and resistant market within the global economy.Evolution of the Global Online Retail“GLORE50”index share price,2016-presentIs it a new normal?Despite seeing a decline in deal activit

5、y in the sector,many people are still bullish about the developments of the Digital Commerce M&A market.They see the decline in deal volume from 2021 to 2022 as a normalisation of a high phase during the pandemic or in other words,as the new normal.They believe that the lack of euphoria within the m

6、arket is merely caused by the comparison of 2022 results with the pandemic highs of 2021.However,overall,we are seeing a stabilizing and slowly increasing deal count in some of our subsectors,as well as positive new developments and long-term trends that are holding up the market segment.0%100%200%3

7、00%400%500%600%Dec 15Dec 16Dec 17Dec 18Dec 19Dec 20Dec 21Dec 22-51%Source:451 Database,S&P CapitalIQ,Hampleton Research.2|10 Digital Commerce M&A Overview 1H 2023Total number of Digital Commerce M&A transactions by quarter,2016-2022-22%M&A summaryDigital Commerce M&A normalising after a record-break

8、ing start to 2022Fromtheendof2020,M&AvolumesinDigitalCommerce experienced a steep increase,with breakingrecords in every quarter.COVID as an accelerator ofdigitalisation in 2020 and 2021 increased the investorsinterest in the thriving Digital Commerce sector.Thecategory underwent an unprecedented gr

9、owth spurt of+38%in those years.In 2022 the category saw a total of2,167 deals,which is a-9%decrease to the record-breaking figures of 2021.The investors bullishness in the Digital Commerce M&Amarket was exhibited in the record-high deal volume inthe first quarter of 2022.The downturn in the secondq

10、uarter by-22%is in line with the overall decline of theM&A market.Political and economic uncertainties,aswell as the markets inherent inclination to normalize.after a period of high activity and volatility,have causedthis downswing.A+5%uptick in deal activity was seen in the last quarterof 2022.Deal

11、 volumes are normalising at a higher level(north of 450 deals)than in 2016-2019,where we saw adeal average of 385.Active acquirers have decreasedfrom 14%to 7%in 2H 2022.This reservation of theformerly notorious buyer group makes a significantdifference to deal volumes in the market.As we knowthat th

12、e acquirers funds are filled,we assume that thebackward trend is a result of acquirers becoming moreselective and diligent with their acquisitions.We know that events at the beginning of 2022 hadimpacted investors moods.We see a stabilisation of dealactivity at a new normal in the Digital Commercese

13、ctor for 2023.7%Share of active acquirers that made 1 acquisition in 20225,474Number of active acquirers in the past 30 months448 445 453 424 420 407 373 356 326 408 358 368 324 319 392 351 461 324 377 560 549 571 606 644 699 544 451 473 Q12016Q22016Q32016Q42016Q12017Q22017Q32017Q42017Q12018Q22018Q3

14、2018Q42018Q12019Q22019Q32019Q42019Q12020Q22020Q32020Q42020Q12021Q22021Q32021Q42021Q12022Q22022Q32022Q42022+5%Source:451 Database,S&P CapitalIQ,Hampleton Research.3|10 Digital Commerce M&A Overview 1H 2023AcquirersAcquisitionsin 30monthsThree notable Digital Commerce acquisitions19Crystal Dynamics In

15、c.Crystal Dynamics Inc.Video game developerSquare Enix Holdings Co.LtdSquare Enix Holdings Co.Ltd.PC,console&mobile games developerAspyrAspyrMedia Inc.Media Inc.Video game developer&publisher15Shift Up Corporation Shift Up Corporation Game design and development studioInflexion Studios Inc Inflexion

16、 Studios Inc-Game design and development studio1C Entertainment S.A.1C Entertainment S.A.-Game design and development studio11TinyTapTinyTapLimited Limited Educational games SaaSWePlayWePlayMedia Holdings LLC Media Holdings LLC Game design and development studioBDVL OU BDVL OU Digital assets payment

17、 SaaS10MacGregor Partners,LLC MacGregor Partners,LLC-SCM SaaS&consulting servicesOpenmindOpenmindSrlSrlE-Commerce consulting servicesLEXTA GmbH LEXTA GmbH Technology consulting services8flexEngageflexEngageInc.Inc.POS&marketing automation SaaSInspirock Inc.Inspirock Inc.Online travel planning servic

18、esPriceRunner International AB PriceRunner International AB Online platform for price comparison services8WordWatchWordWatchInc.Inc.Product data feed optimization SaaSSellerActiveSellerActiveInc.Inc.E-commerce SaaS&services180Commerce LLC 180Commerce LLC E-commerce marketing SaaS&services7TakeLesson

19、sTakeLessonsIncInc.Online instructor directorySuplariSuplariInc.Inc.Procurement data analytics SaaSTantalus Media Pty Limited Tantalus Media Pty Limited Video game developer7Valkyrie Entertainment,LLC Valkyrie Entertainment,LLC Video game developerNixxesNixxesSoftware B.VSoftware B.V.Video game desi

20、gn,development,and portingTiger Media International GmbH Tiger Media International GmbH Electronic publishing of childrens books.Source:451 Database,S&P CapitalIQ,Hampleton Research.Top acquirers of Digital Commerce targets,2020-20224|10 Digital Commerce M&A Overview 1H 2023InternetServices&PortalsD

21、igital commerce services,analysis&reference providers,onlineadvertising,directories,search,exchanges,education.Digital Commerce SoftwareDigital marketing and e-commerce software,CRM,advertising enablement,marketing automation.Agencies&Services ProvidersMobile&web marketing,e-mail marketing and measu

22、rement,campaign management services,web design&development.Media,Social&GamingSocial networking,online games,e-sports,entertainment,online communities,video,blogs,music,news content.Online RetailE-commerce retailers,online marketplaces,classifieds,auctions.Thebreakdownofthesubsectorsshowsthedevelopm

23、ent of M&A transaction in each subsector overtime.While transactions in the sector of Agencies&Service Providers have seen a steady increase,the rest ofthe sectors have seen a downturn since the beginning of2022.The Media,Social&Gaming sector has managed tocatch up in terms of deal volume since the

24、pandemic.Wesaw a large majority of active acquirers in 2022 invest intargets in the Gaming sector.The steepest decrease,on the other hand,can be seen indealstargetingInternet Services&Portals withadecrease of-37%in Q4 2022 compared to last years Q4.This is followed by the Digital Commerce sector,whi

25、chexperienced a-31%decline in the same timeframe.Interestingly,dealstargetingAgencies&ServiceProvidershaveincreasedby+8%overtheyear,compared to 2021.Currently,all five segments areseeing roughly equal transaction volumes.Total number of M&A transactions by subsector&by quarter,2016-2022Share of deal

26、 count by subsector in 2H 2022Source:451 Database,S&P CapitalIQ,Hampleton Research.Subsector breakdown21%18%24%17%20%-50 100 150 200 250Q116Q216Q316Q416Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422Internet Services&PortalsOnline RetailMedia,Social&G

27、amingAgencies&Services ProvidersDigital Commerce Software5|10 Digital Commerce M&A Overview 1H 2023given the current market sentiment and downturn indeal numbers.However,the reality for 2022 was thatfewerdealstargetingattractivecompaniescreatedstablemultiplesas well as some remarkablyhighvaluations.

28、Clearly,successful and promising companiesstillenjoyahealthyM&Amarket,andthereiscompetition among investors.E-CommercepaymentSaaS a pursuedtargetOver the last two years,payment solutions have been aprevailing target for acquirers worldwide.In total,22targets offering digital commerce payment technol

29、ogieswere sold.One of the top-3 largest disclosed transaction includesthe acquisition of Credorax Bank Ltd.(trading under.InSeptember2022,theSwedishprivateequitycompanyEQTacquiredBTRS Holdings Inc.(knownas Billtrust)for$1.6bn in ago-privatetransaction.Billtrust offers cloud-basedsoftwareandintegrate

30、dpaymentprocessingsolutions that simplify andautomate digital commerce.Deal activity saw a steep decline from Q1Transactions in the Digital Commerce Software sectorare coming down from a historically unprecedentedhigh in Q1 2022,which was partially caused by a delayedclosing of deals from 2021.Overa

31、ll,the transactioncount increased by+25%from 2021 to 2022.We areassuming a normalisation of the hot market withvalues stabilizing at a new level.The trailing 30-month EBITDA multiples reached 12.5xin the final quarter of 2022 a rather high multiple.Digital Commerce SoftwareACQUIREDSep 2022$1.6billio

32、nACQUIREDMar 2022$575millionFinaro)by Shift4 PaymentsLLC,a NYSE-listed Americanpayment processing companyfor$575m.Finaro is a globalpayment provider that wasestablishedtoaddresstheproblem that 30%of onlineshoppingis cancelled afterthe clearing bank(usually intheUSorUK)refusestoapprovetransactionswit

33、h.customers from distant countries.Shift4s investment rationale behind the deal was to enlarge the current service offering.E-commerce encompasses online payment technologies.Heavy investments into these technologies are fuelingthe growth of the entire e-commerce space as theyfacilitateonlineshoppin

34、gforbothconsumerandmerchants.They make payments for customers faster,safer,more transparent.For merchants they open a doorthem to offer their products and services online,makingtheir online shops more customer friendly,safe,andstandardised.Source:451 Database,S&P CapitalIQ,Hampleton Research.2.0 x4.

35、5x3.8x18.0 x10.0 x12.5x0.0 x2.0 x4.0 x6.0 x8.0 x10.0 x12.0 x14.0 x16.0 x18.0 x20.0 x-20 40 60 80 100 120 140 160 180 200Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422All trailing 30-month median multiples are calculated as the median value of all dis

36、closed multiples in the sector over the past 30 months.This calculation method helps smooth out the data which,if presented on a quarterly basis,would be skewed by extremely high or low values.6|10 Digital Commerce M&A Overview 1H 2023GamingTechin highdemandin the wholesectorOver the last two years,

37、we saw a record number ofaround 97 deals in online gaming category within thesector.The most active acquirers over the last 30months were all acquirers of gaming companies.InApril,thepubliclylistedBritishcompanyInternational Game Technology PLC(IGT)acquired theMaltese,leading i-gaming content provid

38、er and third-party game aggregator ISBT Holdings Ltd for$174million at a revenue multiple of 5.33x and an EBITDAmultiple of 20.0 x.In May,Skybound Game Studios Inc.,a US-basedentertainmentproductioncompany,acquiredtheDanish gaming developer 5ThPlanet Games A/S for ca.$8 million at a revenue multiple

39、 of c.5.96x in a majorityacquisition.Skybound is a leading entertainment company with toptier IP in print,gaming,and film(like The Walking Deadand Invincible).Media,Social&GamingTrailing 30-month EBITDA multiples inched upwards toahealthy11.1x,whilethecorrespondingrevenuemultiple was stable at 3.4x.

40、Deal volume on a new level,valuations on the riseAs expected,the Media,Social&Gaming sector wastransformed with the onset of COVID in Q4 2020.Resultwas that transaction volumes rose by 134%from 2020 to2021.In post-pandemic 2022 the transaction countdeclined by-27%to 438 with the normalisation of the

41、market at a higher new normal than pre-pandemic.ACQUIREDMay 2022$8 millionACQUIREDDec 2022$174 millionItoperatesandprovidesgaming technology productsworldwide.Theinvestmentcase behind this acquisitionincludes the access for IGT toIP content,game aggregationcapabilities,analytics,andstrong creative t

42、alent.AccordingtoSkybound,their investment rationaleprimarilyincludedtheaccesstoscarcehumancapitalintheareaofinteractive entertainmentin Europe.Source:451 Database,S&P CapitalIQ,Hampleton Research.2.4x3.5x3.4x10.0 x15.0 x11.1x0.0 x2.0 x4.0 x6.0 x8.0 x10.0 x12.0 x14.0 x16.0 x-20 40 60 80 100 120 140

43、160 180 200Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422All trailing 30-month median multiples are calculated as the median value of all disclosed multiples in the sector over the past 30 months.This calculation method helps smooth out the data whic

44、h,if presented on a quarterly basis,would be skewed by extremely high or low values.7|10 Digital Commerce M&A Overview 1H 2023AutoNation In December 2022,AutoNation Inc,a US-based on-site andonlineautoretailer,acquiredRepairSmithIncfor$190million.The2018founded target is a full-servicemobilesolution

45、forautomotivemaintenanceandrepairheadquartered inCaliforniawithoperationsallovertheUS.Listedon theNewYorkStockExchange,AutoNation(1991)isone of Americas largest automotive retailers with over 12.In November this year,AutoNation acquired a minoritystake(6%)in the NASDAQ-listed TrueCar Inc(2005).The U

46、S-based company provides an automotive pricingand information website for new and used car buyers.Internet Services&PortalsWhile revenue multiples have been stable over the pastsix years,EBITDA multiples saw an uptick from 11.9x inQ42021 to 15.5x in Q42022.As with Digital CommerceSoftware,this is a

47、high 30-month median given thecurrent market sentiment.But 2022 proved to be a solidyear for attractive companies which benefited from moreselective buyers or investors and stable multiples,as wellas some remarkably high valuations.Dealvolumeand valuationsback on the riseIncomparisontoothersectorswi

48、thinDigitalCommerce,transaction volumes in the Internet Services&Portals sector was relatively stable throughout thepast six years.Despite quarterly fluctuations,the overallmarket did not experience a significant volatility intransactions even during the pandemic.With 569transactions in 2021 to 565

49、in 2022,the sector saw onlya-1%decline.ACQUIREDDec 2022$190 millionmillioncustomersand21,000employees.Theinvestmentcaseincludestheaimofacquiringadditional capabilities and acustomer base of vehicleownerswhohavepurchasedtheirvehicleoutside of the AutoNationnetwork.It delivers an end-to endwayforcusto

50、merstonavigate their car journey.This minority acquisitionopens doors to collaborateinprovidingauniquedigital buying and sellingexperience.MINORITY SHARENov 2022UndisclosedSource:451 Database,S&P CapitalIQ,Hampleton Research.2.3x3.4x2.9x9.6x15.2x0.0 x2.0 x4.0 x6.0 x8.0 x10.0 x12.0 x14.0 x16.0 x-50 1

51、00 150 200 250Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422All trailing 30-month median multiples are calculated as the median value of all disclosed multiples in the sector over the past 30 months.This calculation method helps smooth out the data w

52、hich,if presented on a quarterly basis,would be skewed by extremely high or low values.8|10 Digital Commerce M&A Overview 1H 2023TheDutchvideogamedeveloperandadvertisingservices provider Azerion acquired several targets inAdvertisingTech over the past two years.Aiming to growtheir platform,presence

53、in the market,and serviceoffering,they invested heavily in the sector.In one of the most recent acquisitions,they took overHybrid Theory Global Ltd.The 2011 founded,UK-baseddigital agency was acquiredInOctober,Azerionacquired Mmedia B.V.aDutchdigitaladvertisingagency.The leading saleshouse,tech part

54、ner,andintermediaryforpublishers and advertisersin the Netherlands has astrong focus on the sports,lifestyle,andautomotivesector.Agencies&Services Providersdecline from 7.7x to 7.5x,while revenue multiplesremained level.Dealvolumeon the rise over the last yearTransactions in Agencies&Service provide

55、rs increased by8%year over year to an unprecedent level of 312 deals.The trailing 30-months EBITDA multiples saw a slight.InvestmentsintoAdTechdominatingthe landscapeACQUIREDNov 2022$9 millionACQUIREDOct 2022$10 millionacquired by Azerion for$9matarevenuemultiple of 0.5x.HybridTheoryGlobalisacontent

56、-leddataandtechnology company thathas a significant presencein the US market as wellas the Asia Pacific region,granting Azerion instantaccesstohigh-growthregions.The largest disclosed deal in the sector was the majorityacquisition(64%)of the publicly listed,US-basedDigital Media Solutions Inc.(DMS)b

57、y Prism Data LLC.Both the target and the acquirer are leading digitalperformance marketing companies in the US.DMS wasacquired for$298 million at a revenue multiple of 0.8xand an EBITDAmultiple of 19.6x in a go-privatetransaction.Source:451 Database,S&P CapitalIQ,Hampleton Research.1.7x1.1x16.5x7.1x

58、7.5x0.0 x2.0 x4.0 x6.0 x8.0 x10.0 x12.0 x14.0 x16.0 x18.0 x-10 20 30 40 50 60 70 80 90 100Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422All trailing 30-month median multiples are calculated as the median value of all disclosed multiples in the sector

59、 over the past 30 months.This calculation method helps smooth out the data which,if presented on a quarterly basis,would be skewed by extremely high or low values.9|10 Digital Commerce M&A Overview 1H 2023Investment into fashion home furnishing continuesStrategicandfinancialinvestorsarecontinuingtoi

60、nvestintoonline fashion and home furnishing retailers.Frasers Groupplc,a publicly listed UK retailer and department store hasacquiredthree companies over the last six months.InDecember,it acquired Amara Living Ltd(2005),a Britishonline retailer of luxury home furnishing.In August,itacquired a majori

61、ty stake(71.3%)of publicly listed MySaleGroup plc for$19 million.MySale operates as an onlineretailer with online flash sales and retail websites inAustralia,NewZealand,andSouth-EastAsia.Finally,inJuneitacquired certainIPfromMissGuidedfor$20million.Nordic Capital,a Danishprivateequityfirm,acquiredEl

62、losGroupHolding(2011)in July thisyear.The target is an is anonline retailer of fashionandhomefurnishingswith around$345 millionin revenue(2021).Online RetailA similar decline is to be seen in median EBITDAmultiples.In Q422 they were at their lowest of 9.4xsince 2016.In the last quarter of 2022,a sli

63、ght upswingin deals can be seen,however,it is to early to tell if thisdevelopment will continue.OnlineRetailtransactionsstabilisingAfter a peak in deal volume in the second and thirdquarter of 2021,transactionvolumes haveseenaquarterly decline.Year-over-year the number of dealshas declined by-32%in

64、2022,with yearly transactionvolume being at its lowest since 2015.ACQUIREDJun 2022$20 millionACQUIREDAug 2022$19 millionACQUIREDDec 2022Not disclosedACQUIREDJul 2022Not disclosedIt offers products under the brand names Ellos,Jotex,Stayhard,and Homeroom.Source:451 Database,S&P CapitalIQ,Hampleton Res

65、earch.0.8x1.4x14.6x9.4x0.0 x2.0 x4.0 x6.0 x8.0 x10.0 x12.0 x14.0 x16.0 x-20 40 60 80 100 120 140 160 180Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319Q419Q120Q220Q320Q420Q121Q221Q321Q421Q122Q222Q322Q422All trailing 30-month median multiples are calculated as the median value of all disclosed multiples

66、 in the sector over the past 30 months.This calculation method helps smooth out the data which,if presented on a quarterly basis,would be skewed by extremely high or low values.10|10 Digital Commerce M&A Overview 1H 2023About Hampleton PartnersHampleton Partners is at the forefront of international

67、mergersand acquisitions advisory for companies with technology at their core.Hampletons experienced deal makers have built,bought and sold over 100 fast-growing tech businesses and provide hands-onexpertise and unrivalled international advice to tech entrepreneurs and the companies who are looking t

68、o accelerate growth andmaximise value.With offices in London,Frankfurt,Stockholm and San Francisco,Hampleton offers a global perspective with sector expertise in:Automotive Tech,IoT,AI,Fintech,Insurtech,Cybersecurity,VR/AR,Healthtech,Digital Marketing,Enterprise Software,IT Services,SaaS&Cloud and E

69、-Commerce.Ralph HbnerSector PThe start of the pandemic in 2020 launched a wave of growth in Digital Commerce.Thedemand for technology to facilitate the“new normal”surged and the economy includingthe M&A market reacted accordingly.This caused record transaction volumes in DigitalCommerceM&A throughou

70、t 2021.This growth spiked in Q1 2022,before dealmaking slowed down significantly.War,supplychain issues and various crises worldwide caused high inflation,and a corresponding rise ininterest rates and the cost of living.Rumours of a looming recession are public knowledgenow.The Digital Commerce M&A

71、market slowed down from Q2 2022,but only compared to Q12022 and the post-Covid growth spurt.In reality,the market stabilised,returning to pre-pandemic levels.Acquirers are continuing to seek new digital technologies;however,theyhave become more selective and are back to being risk averse,with higher

72、 interest ratesinhibiting leveraged investments.We still see a large market with strong multiples formature and healthy companies in Digital Commerce.Equally,we believe that the market forcompanies with fewer proven successes is limited.Conclusion&ContactsIt is difficult to provide reliable outlooks

73、 for 2023.Based on our current knowledge,we believe that in the next two to three years theglobal,unified Digital Commerce M&A market will become more segmented.We see the evolution of stronger regional differences interms of deal value and multiples,and hence also in M&A demand and supply.People an

74、d companies are confident in a clear road to profitability as we emerge from a difficult 2022.However,this trajectory will not belinear.The digital commerce market is still a melting pot of great innovative ideas;and where there are ideas,there are investors withsubstantial amounts of dry powder.Ham

75、pleton provides independent M&A and corporate finance advice to owners of Autotech,Internet,IT Services,Digital Commerce,and Software companies.Ourresearch reports aim to provide our clients with current analysis of the transactions,trends and valuations within our focus areas.Further contributions

76、to this report were made by Lolita White,Senior Analyst,Hampleton Partners.Data Sources:We have based our findings on data provided by industry recognised sources.Data and information for this publication was collated from the 451 Research database,a division of The 451 Group;and S&P CapitalIQ.For m

77、ore information on this or anything else related to our research,please email the address provided on our website.Disclaimer:This publication contains general information only and Hampleton Ltd.,is not,by means of this publication,rendering professional advice or services.Beforemaking any decision o

78、r taking any action that may affect your finances or your business,you should consult a qualified professional adviser.Hampleton Ltd.shall not beresponsible for any loss whatsoever sustained by any person who relies on this publication.2023.For more information please contact Hampleton Ltd.Hampleton

79、 produces regular reports on M&A activity in the following sectorsHampleton produces regular reports on M&A activity in the following sectorsHR TechInsurtechIT&Business ServicesAR/VRArtificial Intelligence Automotive TechnologyCybersecurityDigital CommerceEnterprise SoftwareFintechHealthtechYou can subscribe to these reports at http:/ FranciscoFollow HampletonFollow Hampleton