‘Moribund’ Q2 Ready for M&A Bounce-Back

Media bankers The Jordan, Edmiston Group today released their first half 2009 M&A report. As expected, the numbers aren’t particularly glowing, but there are pockets that, while still down from same period last year, are seeing some legitimate activity, particularly in the online media segment.

JEGI described the second quarter as “moribund” with 171 announced transactions at a total value of $4.1 billion across the 12 sectors it tracks. However, with the total volume and value at 300 and $5.4 billion for the half, the second quarter has performed decidedly better than the first. Yet this is no consolation when compared to the first half of 2007, media M&A’s heyday, when deals topped 397 at a $66 billion total value.

In the first half, the most active M&A sectors were Online Media & Technology and Marketing & Interactive Services (similar to JEGI's first half 2008 report). Together, these two sectors accounted for 50 percent of the total deals completed, but are still nowhere near first-half 2008 levels. Online Media and Technology saw 84 transactions valued at $1.3 billion, while Marketing and Interactive had 66 transactions valued at $877 million—down 77 percent and 84 percent in value compared to same period last year.

JEGI tracked only six deals completed in the first half for b-to-b magazines—including Jim Casella’s Asset International acquiring The Trade, and Scranton Gillette’s acquisition assets from Reilly Communications Group—with no significant transactions.

Consumer magazines fared better in the first half with 24 deals valued at $112 million, accounting for gains of 33 percent and 25 percent, respectively, over first-half 2008.

JEGI noted that strategic buyers are “swinging from defensive positions to looking for opportunities to accelerate growth and tap into new business models.”

Despite the beating that events have taken over the last year, exhibitions and conferences remained active with 20 deals. Transaction sizes, however, were small, totaling only $78 million. Also seeing 20 deals were database and information services, with an 11 percent increase over 2008. Deal value, however, fell, as none were large enough to offset the multi‐billion dollar transactions in the first half of 2008, such as Reed Elsevier’s $4.1 billion purchase of Choicepoint.

The biggest bright spot currently, says JEGI, is the Mobile Media and Technology sector, growing 46 percent in volume and 38 percent in value over last year at $148 million.

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