Report: Media M&A Flat Through Third Quarter
Differences in b-to-b, consumer; online, tech, marketing services dominate.
A media M&A report for the first three quarters is out from M&A advisory firm the Jordan, Edmiston Group and transaction volume is about equal to the same period 2010, with value up by 10 percent to about $35 billion. While b-to-b media deals were few and far between, b-to-b online media, exhibition and conference, and marketing and interactive services sectors did well for the period.
According to JEGI, there were about 694 total transactions in the first three quarters across the 10 media industry sectors tracked, down slightly from 698 in the same period 2010. The increase in value, however, was due to larger deals.
The b-to-b and b-to-c technology, mobile, and marketing and interactive services sectors continued to dominate the sales activity, accounting for 73 percent of the deals and 63 percent of total value for the period.
B-to-b media only recorded 11 deals with a combined value of $38 million through the third quarter, down from the 33 deals and $470 million value during the first three quarters of 2010—67 percent and 92 percent declines respectively.
Consumer magazines saw some large deals getting done, notably Hearst’s acquisition of the Lagardere titles for $651 million and TPG Capital’s acquisition of Primedia’s home and apartment guides from KKR for $525 million. Total deal value for the sector in the first three quarters was $2.2 billion, way up from the $131 million recorded in the same period last year—even though JEGI recorded only one more transaction so far this year (20) than last year (19).
Meanwhile, the exhibitions and conferences sector has done well during the first three quarters of 2011. While the number of transactions is the same as the first three quarters of 2010 at 18, value jumped 242 percent from $109 million to $371 million.
In terms of value and volume, marketing services continues to be a hot sector, accounting for the highest number of deals and value for the period. JEGI recorded 212 deals with a combined value of about $8.8 billion, up 18 percent and 24 percent respectively from 2010.
While JEGI says that strategic buyers are the most active, private equity could be priming for a comeback. PE managed a number of $100 million-plus deals in the first three quarters and JEGI cites a Cambridge Associates report that says firms have $376 billion in cash ready to be spent. Also of note are the PE acquisitions that occurred in the mid-2000s that are expected to come back into the market in the next year or so.