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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Marketing (20)

    Monday
    May152017

    TRANSACTION ACTIVITY IN THE B2B INFORMATION SEGMENT UNDERGOING A SIGNIFICANT INCREASE

    According to Berkery Noyes’ Media and Marketing report for Q1 2017, industry deal volume underwent a two percent uptick over the past three months. Aggregate value fell from $145 billion to $15.8 billion.

    Of note, two of the industry’s top three highest value acquisitions last year occurred in Q4 2016. This included AT&T’s announced acquisition of Time Warner for $105.3 billion, or $85.4 billion if net debt is excluded. If the Time Warner deal is omitted, value decreased 59 percent, which was about the same decline in value when examined on a year-over-year basis.

    Total volume in the B2B Publishing and Information segment increased 33 percent in Q1 2017. This made it the sector with the largest rise in volume over the past three months. High profile B2B related deals in Q1 2017 included Gartner’s acquisition of CEB Global, a corporate research and advisory firm, for $3.3 billion; and Solera Holdings’ acquisition of Autodata Limited, which provides technical information to the automotive aftermarket, for $422 million.

    Other notable B2B transactions during the quarter were Vitruvian Partners’ acquisition of OAG Worldwide, a provider of flight status and scheduling information, for $215 million in a management buyout from AXIO Data Group; Zoopla Property Group’s acquisition of Hometrack, a provider of residential property market insights and analytics, for $152 million; and Dun & Bradstreet’s acquisition of Avention, a multi-channel platform that offers business information and sales enablement solutions, for $150 million.

    As for other select markets covered in the report, volume in the Internet Media segment increased 18 percent on a quarterly basis. Internet Media also nearly surpassed the Marketing segment as the industry’s most active sector in Q1 2017. The Exhibitions, Conferences and Seminars segment saw volume improve ten percent, which followed a 48 percent rise in Q4 2016. Deal activity in the Consumer Publishing segment fell 22 percent in Q1 2017 but remained about constant year-over-year.

    “Companies that offer events, subscription-based data offerings and/or marketing services, are likely achieving growth and are attractive to both strategic and private equity acquirers,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “New acquirers such as TBG AG, a Zurich-based family office that just announced the acquisition of DTN, the U.S. real-time weather service to the agricultural sector, enter to create a dynamic M&A market. Large strategics’ divestitures of non-core properties and private equity timely exiting portfolio companies, coupled with private company sellers, have fueled this sellers’ market.”

    Tuesday
    Jan242017

    TRANSACTION VALUE SURGES IN THE MEDIA & MARKETING INDUSTRY

    Berkery Noyes’ Media and Marketing report for full year 2016 showed that deal volume declined five percent on a year-to-year basis. Aggregate value more than doubled, from $105.67 billion to $272.17 billion. The rise in value was due in major part to AT&T’s announced acquisition of Time Warner for $105.27 billion, or $85.4 billion if net debt is excluded.

    This was the highest value deal ever tracked by Berkery Noyes in the Media & Marketing Industry. If the Time Warner deal is omitted, overall value increased 58 percent. The Time Warner transaction is being referred to as a vertical merger, in that two different kinds of businesses are being combined. AT&T is planning to diversify its business beyond telecommunications with Time Warner’s vast array of programming.

    The Internet Media segment underwent a ten percent yearly decrease in deal activity. This followed a 21 percent rise in 2014. Notable segment transactions during 2016 included Microsoft’s acquisition of LinkedIn, a business social networking site, for $25.93 billion; AOL’s announced acquisition of Yahoo’s core operating business for $4.83 billion; Ctrip’s announced acquisition of Skyscanner, a global travel search site, for $1.74 billion; Ziff Davis’ acquisition of Everyday Health, a digital media company that produces content relating to health and wellness, for $465 million; and Randstad Holding’s announced acquisition of Monster Worldwide, an online jobs site, for $429 million.

    The Marketing segment, which for the purposes of this report excludes pure software-based companies, experienced a two percent yearly uptick in volume. Meanwhile, volume in the digital marketing subsector increased seven percent throughout the past twelve months.

    “Advertisers are rapidly exploring various digital options,” said Vineet Asthana, Managing Director at Berkery Noyes. “Their revenue mix continues to tilt toward digital at the expense of print, while events hold their steady level of the share of the total.” Asthana continued, “Advertisers are actively searching for media strategies that utilize multiple platforms to reach their target audiences. Historically, their core competencies have not always included mastering the intricacies of digital, print, events, and cross-media marketing. New digital platforms are creating more opportunities to reach specific target groups effectively.”

    M&A activity in the Entertainment segment increased four percent year-over-year. High profile Entertainment deals in 2016 included Lionsgate’s acquisition of Starz, a media and entertainment company that provides premium movie and original programming services, for $4.4 billion; NBC Universal’s acquisition of DreamWorks Animation, which creates animated feature films and television programs, for $4.1 billion; IMG Worldwide’s acquisition of Ultimate Fighting Championship, a professional mixed martial arts organization, for $4 billion; and Dalian Wanda Group’s acquisition of Legendary Entertainment, a media company with film, television, and digital divisions, for $3.5 billion. 

    Monday
    Jan252016

    MEDIA AND MARKETING DEAL VOLUME RISES THROUGHOUT MOST INDUSTRY SEGMENTS

    Berkery Noyes’ Media and Marketing report for full year 2015 indicated that deal volume improved eight percent on a year-to-year basis. Aggregate value gained 12 percent, from $97.07 billion to $109.01 billion. In terms of valuations, the median revenue multiple moved slightly from 2.0x to 1.9x, while the median EBITDA multiple decreased from 11.0x to 8.7x.

    The Internet Media segment underwent a 19 percent increase in deal activity. Online shopping giant Alibaba Group was a notable segment acquirer with the announced acquisition of Youku Tudou, a Chinese-based Internet television platform that enables users to search, view and share video content across multiple devices, for $3.37 billion. Alibaba, in which Yahoo! owns a 15 percent stake, also completed a related deal in 2014 when it acquired a 60 percent stake in ChinaVision Media Group, a television and film producer.

    The Marketing segment experienced a six percent rise in volume. Of note, there were no Marketing acquisitions that made the industry’s top ten list of highest value deals during the year, as opposed to four in 2014.

    The segment with the largest year-to-year rise in volume was Exhibitions, Conferences, and Events. This sector saw volume increase 33 percent, from 85 to 113 acquisitions. The most active related acquirer in 2015, either directly or through an affiliated business, was Providence Equity Partners with six transactions.

    M&A activity in the Entertainment segment, after rising six percent during 2014, remained constant over the past year. Regarding value, the segment’s largest transaction in 2015 was Activision Blizzard’s acquisition of King Digital Entertainment, creator of the well-known mobile game Candy Crush Saga, for $5.9 billion.

    Deal flow within the B2B Publishing and Information segment improved 11 percent on a yearly basis. In addition, the B2B segment had the industry’s largest rise in value, more than doubling from $9.38 billion to $23.01 billion. This gain was due in part to Intercontinental Exchange’s acquisition of Interactive Data Corporation, a provider of financial market data and analytics, for $7.45 billion.

    “There has been a steady uptick in media mergers and acquisitions activity, with more deals on the horizon and a positive outlook going forward,” said Vineet Asthana, Managing Director at Berkery Noyes. “Companies with a balance of revenue streams, some recurring revenue and more subscription type products in the mix are especially attractive to acquirers.”

    Tuesday
    Oct132015

    B2B PUBLISHING AND INFORMATION DEAL VOLUME SHOWS SIGNS OF STRENGTH

    Deal volume in Berkery Noyes’ Media and Marketing report for third quarter 2015 declined six percent between second and third quarter 2015. However, the number of transactions year-to-date increased four percent compared to the corresponding timeframe in 2014. Aggregate value rose 15 percent on a quarterly basis, from $20.8 billion to $24.0 billion.

    The B2B Publishing and Information segment experienced a 38 percent improvement on a quarter-to-quarter basis, from 39 to 54 deals. Strategic acquirers were responsible for 85 percent of the segment’s volume year-to-date, as opposed to 72 percent of volume throughout the first three quarters of 2014. The largest B2B deal in third quarter 2015 was McGraw Hill Financial’s acquisition of SNL Financial, a news, data, and analysis provider, for $2.2 billion. 

    M&A volume in the Consumer Publishing segment stayed about the same with 30 transactions. The largest Consumer Publishing deal in third quarter 2015 and year-to-date was Japanese media group Nikkei’s announced acquisition of The Financial Times from Pearson for $1.3 billion. Pearson has completed several recent divestitures as it looks to focus on its global education business.

    M&A activity in the Marketing segment decreased eight percent during the third quarter. This followed a 14 percent rise from first to second quarter 2015. The highest value Marketing deal in the third quarter was comScore’s announced acquisition of Rentrak Corporation, a cross-platform media measurement firm, for $827 million. Rentrak will be merged with comScore and serve as a competitor to current leaders in the analytics and media tracking space such as Nielsen.

    Meanwhile, WPP was the overall industry’s most active acquirer year-to-date with 20 transactions, 12 of which of occurred in the third quarter. The largest of these deals was WPP Group and Providence Equity Partners’ announced acquisition of Chime Communications for $550 million. Chime Communications provides public relations, advertising, sports marketing, market research, direct marketing, and design and event management consultancy services.

    Another notable Marketing transaction during the quarter was Sony Pictures Television’s acquisition of a majority stake in IMS Internet Media Services, an ad sales and media buying firm focused on the Latin American market, for $100 million. In terms of specific subsectors, digital marketing deals accounted for 46 percent of the segment’s volume in the third quarter, a ratio that was consistent with the previous two quarters. “Deal flow in the digital marketing subsector has remained strong throughout the year,” said Vineet Asthana, Managing Director at Berkery Noyes. “The vast majority, more than 90 percent, have been completed by strategic acquirers. They are looking to supplement their organic growth, and without the pressure to exit their investments, are often focused on the long-term value of obtaining new products and services.”

    Thursday
    Jul232015

    INTERNET MEDIA VOLUME OUTPACES ALL OTHER INDUSTRY SECTORS IN FIRST HALF 2015

    Berkery Noyes’ Media and Marketing report for first half 2015 revealed that deal volume saw a three percent uptick on a half year basis, from 841 to 863 transactions. Total value fell 31 percent, from $52.72 billion to $36.48 billion.

    The highest value deal in first half 2015 was Verizon Communications’ acquisition of AOL for $4.13 billion in the Internet Media segment. Internet Media also had the largest half year increase in volume, rising 25 percent. Regarding specific Internet Media subsectors, there was a 36 percent rise in the online classifieds marketplace, from 47 to 64 acquisitions. One of the largest related deals thus far in 2015 was CoStar Group’s acquisition of Apartment Finder for $170 million.

    Marketing transaction volume underwent a four percent increase in first half 2015. In addition, deals in the digital marketing subsector represented 45 percent of the segment’s overall activity in first half 2015.

    Japanese advertising company Dentsu was the overall industry’s most active acquirer with nine transactions year-to-date. High profile Marketing deals in first half 2015 included GTCR and Adams Outdoor Advertising’s acquisition of Fairway Outdoor Advertising for $575 million; Red Ventures’ acquisition of Pitney Bowes’ marketing services business, Imagitas, for $310 million; and Solera Holdings’ acquisition of DMEautomotive, a provider of marketing solutions for the retail automotive industry, for $143 million.

    Deal activity in the Exhibitions, Conferences, and Seminars segment saw a twelve percent improvement, from 43 to 48 transactions. Also of note, private equity backed deals in the segment nearly quintupled between second half 2014 and first half 2015, from four to 19 acquisitions. The segment’s largest transaction in first half 2015 was the acquisition of Cirque du Soleil by an investor group led by TPG Capital for $1.2 billion.

    “Many media and marketing companies are looking for acquisitions to enhance their growth,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “They are also making investments in those areas where their clients are spending the most money and where they can sell their services at a premium. M&A activity is robust due to the high stock market valuations and the low cost of financing transactions.”