88% of Survey Participants Expect 2011 Domestic Deal Volume
to Increase Over Last Year

Findings Released as Part of Gridley’s Tenth Annual Conference

NEW YORK (January 11, 2011) – Gridley & Company LLC (Gridley & Co.), a New York-based boutique investment bank that specializes in the Information Services industry, conducted their year-end mergers and acquisitions (M&A) survey which reveals a high level of optimism for M&A activity in the Information Services industries. More than 88 percent of respondents noted they would be active in Information, Marketing, Internet, Financial Technology or Outsourcing Services sector deals as a likely “buyer” or “seller” in 2011 with 35 percent of participants responding as a “buyer,” about 24 percent responding as a “seller” and 29 percent responding as “both.”

Gridley’s M&A survey was designed to gain insight into deal activity and trends in the Information Services industry over the next 12-18 months. Thirty-eight percent of the respondents identify themselves as Private Company (non-PE) executives, 26 percent as Public Company executives and 21 percent as Private Equity Firm executives. The most popular industries represented by survey respondents are Internet Services, Data Services, and SaaS and Outsourcing Services. In terms of size of transactions, 68 percent of respondents expect to execute deals below $100 million, while approximately 26 percent said they expect to be involved in deals worth between $100 million and $500 million, and six percent noted they may be participating in deals worth more than $500 million.

When asked what type of transaction they plan on in 2011, 50 percent said they plan on acquiring a private company, 32 percent noted they may be involved with the sale of a portfolio company and about 24 percent said they would be fundraising. On par with last year, participants were particularly bullish on public company deals with 82 percent of respondents expecting an increase in 2011 over last year.

Respondents remained positive about the overall M&A environment with nearly 88 percent of those surveyed expecting 2011 domestic deal volume to increase over last year, with about 41 percent saying volume will grow by between 10 and 25 percent in 2011, and 24 percent responding that volume will increase more than 25 percent. Of the private equity investors who participated in the survey, 57 percent of respondents said they expected to do up to five deals in 2011, while about 29 percent answered they would anticipate making between five to ten transactions this year.

“We’re very bullish on the M&A environment and we’re even more encouraged by the fact that our survey respondents are overwhelmingly saying they’ll be active as both buyers and sellers in the Information Services space moving into 2011,” said Linda Gridley, Founder and CEO of Gridley & Co. and host of the Company’s Tenth Annual “IDEA – Innovation… Disruption… Engagement… Action!” Conference being held today at the Jumeirah Essex House in New York City. “As equity markets continue to improve, credit remains available, and companies and PE firms put their excess cash to work, M&A will play a major role in private and public company growth plans. We along with our survey respondents expect deal activity to increase significantly this year, and we are continuing to see a number of very strong and interested buyers and sellers in our space.”

The respondents also revealed that in 2011 the Marketing and Internet Services sectors are where most buyers and sellers expect to be active. Not surprisingly, when asked which “Digital Titans” (Apple, AOL, Facebook, Google, Microsoft and Yahoo) would execute the highest number of deals, about 59 percent answered Google, about 24 percent responded Microsoft and about 15 percent said Apple and Facebook.

Survey respondents noted their increased confidence in the M&A lending environment. Eighty-two percent expected the lending environment to continue to improve and about 15 percent believed it would even out at current levels.

Regarding valuations, Linda Gridley remarked, “Dealmakers continue to see valuations fall more in line with buyer and seller expectations this year, which we expect to help fuel M&A activity in our sectors in 2011. This is backed up by our survey results, where a majority of respondents noted that fair valuations today are in the range of 6x-10x EBITDA.”

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: Marketing, Internet, Financial Technology and Outsourcing 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 2,200 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.

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