Insert multiline text before the first matching line in a file

You could store the previous line in the hold space:

sed '
 /^pattern/{
   x
   /./ {
     x
     s/^/\
/
     x
   }
   x
 }
 h'

It would be more legible with awk though:

awk '!previous_empty && /pattern/ {print ""}
     {previous_empty = $0 == ""; print}'

Like the GNU implementations of sed has a -i option for in-place editing, the GNU implementation of awk as -i inplace for that.

Use ex, the POSIX file editor

ex is the non-visual form of the vi file editor. It actually predates vi. vi (and Vim) still use ex commands; any time you type a colon and enter a command, that is an ex command (though Vim has many custom extensions).

Since ex opens the whole file for reading, rather than operating in a stream, addressing can work backwards as well as forwards, unlike in Sed or Awk.

For this particular edit, use the following one liner:

printf '%s\n' 'set ignorecase' '$+?searchword?i' 'NEWLINE_1_ADDED' 'NEWLINE_2_ADDED' 'NEWLINE_3_ADDED' . x | ex input.txt

To test the command (print to standard output rather than saving to file), use %p rather than x as the final command:

printf '%s\n' 'set ignorecase' '$+?searchword?i' 'NEWLINE_1_ADDED' 'NEWLINE_2_ADDED' 'NEWLINE_3_ADDED' . %p | ex input.txt 

To handle multiple files:

for f in *.txt; do
    printf '%s\n' 'set ignorecase' '$+?searchword?i' 'NEWLINE_1_ADDED' 'NEWLINE_2_ADDED' 'NEWLINE_3_ADDED' . x | ex "$f"
done

Explanation

Running the printf command by itself, you can see the commands which are passed to ex:

set ignorecase
$+?searchword?i
NEWLINE_1_ADDED
NEWLINE_2_ADDED
NEWLINE_3_ADDED
.
x

The set command is self-explanatory.

$+ refers to the line after the last line, and ?...? means to search backward from there. (The + makes it so a file with a matching last line will be handled correctly.) i means to "insert" text before the line found.

The . on a line by itself ends the text to be inserted.

x saves and exits.