Media M&A: Tapping Breaks in Third Quarter
Nevertheless, deals reach record highs for first nine months, buoyed by the ‘extraordinary’ marketing and online media sectors.
This summer’s credit crunch is showing its first signs of stress on the media and information M&A market, according to third-quarter results tracked by investment banking firm Jordan, Edmiston Group, Inc. But deals measured by the firm across 11 media and information sectors for the first three quarters combined are still breaking records. The two dominating sectors, however, are online media and marketing and interactive services—together accounting for 65 percent of total deal volume and 38 percent of total value across the measured sectors.
Combined, online media and marketing services measured 414 deals that, according to the report, reflect the rapidly growing online advertising market. “The robust growth in Internet advertising spend has made online ad networks and technology providers attractive growth acquisitions, and a number of them changed hands in 2007,” says the report.
B-to-b magazine deal volume has been flat, measuring only one more deal (31) in the first three quarters this year over same period last year. Notably, total value is down about 16 percent. The report adds that only one multi-hundred million dollar deal was completed in the third quarter, Incisive Media’s $630 million acquisition of ALM from Wasserstein. There were three $400 million-plus deals in the third quarter of 2006, says the report.
Consumer magazine deals fared better, up in both volume and value, but the report notes that most of the $3.3 billion in deals occurred prior to the third quarter, which tracked slower.
Another bright spot on the deal landscape is the exhibition and conference sector, with 51 deals tracked at a $733 million value, up 46 percent and 15 percent respectively over 2006. The report says that there were no large transactions in the third quarter, but the category saw consistent deal flow from several companies including Reed, UBM, Tarsus Group, and others.