Magazine M&A Moves In Two Directions
Core sectors stay flat, while ancillary categories generate interest.
Core sectors of the magazine media industry saw relatively steady levels of M&A activity in the first half of 2015, but dollars continued to pour into ancillary categories, according to investment advisory firm, the Jordan Edmiston Group.
Consumer media and technology saw both deal volume and value increase slightly through June, up 9 percent and 18 percent, respectively (100 deals; $9.1 billion). Activity in B2B media and technology declined slightly with the number of deals down 27 percent and aggregate value dipping 14 percent (44; $3.1 billion).
It’s also worth noting that JEGI changed their methodology this year, broadening several of the categories related to magazines in particular. Consumer Magazines and B2B Media classifications no longer exist, for example—those subsets instead fall under Consumer Media and Technology, and B2B Media and Technology, respectively. While the move may be a sign of the times, it’s also makes the stats less indicative of patterns in the magazine business specifically.
Meanwhile though, categories that many magazine media companies may have a stake in are seeing activity rise.
Exhibitions and conferences saw the biggest increase in M&A movement of any of the seven media, marketing and technology sectors measured by JEGI—volume rose 40 percent to 42 deals, while value shot up 760 percent to $2.5 billion. Part of the exponential increase in events spending was due to the $1.2 billion purchase of Cirque du Soleil, though the segment still posted growth north of 340 percent without it.
Two other high-priority areas for magazine media companies, mobile media and technology, and database and information services, followed suit—they were each the second-fastest growing segments for volume and value, respectively.
Overall, M&A kept the momentum going from 2014’s strong performance, and JEGI thinks it’ll continue in the near future. Debt concerns in Greece and Puerto Rico muddy the waters a bit, but small business optimism and hiring each hit recent highs in the beginning of the year, while macroeconomic trends continue to move in the right direction.
“Companies are flush with cash and robust debt markets continue to offer historically low interest rates,” the report says. “The strong U.S. economy and rising confidence signals a strong finish to 2015, making it another record year for M&A value since 2007 and the doldrums of the financial crisis.”