Private equity investors are chomping at the bit for more M&A action in 2007 after making headlines in 2006 as the new media M&A rainmakers. Indeed, private equity players are making a splash across many markets, not just magazines and media. Even as small to mid-sized companies are bought out and rolled up into operating platforms, large public companies are taking advantage of the active market to go private – to find relief from Sarbanes-Oxley, among other motivators.
But even as the reporting continues to examine private equity’s boom, there’s a building undercurrent of speculation on when the good times will end. At ABM’s Top Management Meeting in Chicago last November, bankers were marveling out one side of their mouths at private equity’s rise over the last 12 months while wondering out the other side when economic conditions would put the breaks on the whole thing. For now, no one is willing to get too specific. The stars have aligned: publishers have generally built up their event divisions, whether organically or via acquisition, and have moved aggressively into e-media with nary a glass of Kool-Aid in sight. And there’s a hungry pack of buyers ready to get going.
And e-media this year will be a critical dealmaking factor as all of 2006’s must-have features, services and products coalesce into practical (or not) business elements. As if to underscore buyer eagerness and, possibly, the sense that all good things will someday come to an end, the DeSilva + Phillips 2007 M&A Report puts it this way: “In 2006, media executives were still worried that getting it wrong would be more harmful than not acting at all. Yet if there was ever a case of pent-up demand – and a growing recognition that now is the time to act decisively – look at your watch. It’s time.”