Hampleton: E-commerce M&A report for the first half of 2023

E-commerce M&A deals appear to be gaining some momentum again after a sharp drop in deal counts in the same period last year. After falling from a high of 692 in the first quarter of 2022 to 442 in the third quarter of last year, deal counts have been on an upward trend for three consecutive quarters, reaching 526 in the second quarter of this year, according to a Hampleton study.

While the second-quarter figures are slightly lower than the same period last year (538 deals) and well below the more active post-pandemic days (571 deals in the second quarter of 2021), they are well above the pre-pandemic norm, with the number of deals not exceeding 400 at least as recently as the third quarter of 2017.

In the first half of this year, 1,017 deals were completed. The report states that there were 4,650 active acquirers in the past 30 months, with 30% of active acquirers making more than one acquisition in the past 30 months. The most active acquirers during this period were Tencent (12), Accenture (11), and Azerian (11).

The "e-commerce" market includes five sub-sectors, each contributing differently to the deal flow in the first half of the year. Leading the way is the agency and service provider sub-sector, which accounts for 37% of the total deals. It is followed by e-commerce software (21%), internet services and portals (20%), media, social and gaming (13%), and online retail (9%).

The Agency & Service Provider sub-sector has seen a steady increase in the number of deals recently. Although total sales in the second quarter were lower than in the first quarter, they were still well above the same period last year. In addition, the total number of nearly 300 deals in the first half of the year easily exceeded the number of deals announced in the second half of 2022 (196) and the first half of 2022 (150). The median EBITDA for the past 30 months has also increased.

Valuations in the online retail offshoot sector have also been growing, despite a downward trend in the number of deals in the space over the past few years.