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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Media (19)

    Monday
    Feb032014

    MEDIA & MARKETING DEAL VOLUME STAYS CONSTANT AS VALUE SOARS

    Berkery Noyes has issued its Media & Marketing report for full year 2013. The firm’s research showed that deal volume remained nearly constant on a year-to-year basis. However, this represented a six percent rise compared to 2011. Strategic acquirers accounted for 91 percent of the industry’s deal volume in 2013, an increase of five percent relative to 2012.

    Total deal value showed a gain of 28 percent, from $75.81 billion in 2012 to $97.30 billion in 2013. Of note, the announced merger of Publicis and Omnicom was responsible for 21 percent of the industry’s aggregate transaction value in 2013. In terms of valuations, the median revenue multiple increased from 1.4x to 2.0x, while the median EBITDA multiple rose from 8.0x to 9.7x. In both instances, this marked a return to valuations that were seen in 2011.

    The segment with the largest year-to-year rise in volume was Consumer Publishing, which increased 16 percent, from 167 to 193 transactions. Harland Clarke’s announced acquisition of Valassis Communications for $1.78 billion in the shopping guides and coupon subset was the segment’s highest value transaction in 2013. As for other markets covered in the report, deal activity in the Entertainment segment increased six percent between 2012 and 2013. 

    Although the Broadcasting segment saw a decline in volume, its corresponding aggregate value more than tripled. There were 13 Broadcasting transactions above $100 million in 2013, accounting for $11.48 billion in total value.

    “Strong merger and acquisition activity should persist as publishers, advertising agencies and others continue to adapt to change by expanding their digital offerings,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “As the lines between content, marketing and advertising continue to blur, their product depth and breadth will encompass more. All of this has the potential to help fuel M&A activity in the foreseeable future.”

    Tuesday
    Nov052013

    AGGREGATE VALUE IN THE MEDIA AND MARKETING INDUSTRY NEARLY DOUBLES WITH TWO MEGA DEALS DURING THIRD QUARTER 2013

    Berkery Noyes has issued its Media and Marketing report for third quarter 2013. Total value increased 98 percent on a quarterly basis, from $22.3 billion to $44.1 billion. This significant rise was mainly attributable to two announced transactions: the proposed merger of Publicis and Omnicom in the Marketing segment, and the management buyout of Activision Blizzard in the Entertainment segment. Aggregate value would have increased six percent without the Publicis-Omnicom merger. If the management buyout of Activision Blizzard is also excluded, overall value would have declined 31 percent.

    Upon examination of the Marketing segment, volume remained nearly constant, totaling 132 transactions in third quarter 2013. The Publicis-Omnicom merger marks a distinct turning point in the sector, with the creation of a new market leader that is larger than rival WPP. In addition, many transactions in the space up to this point, such as those completed by Publicis, have involved start-ups as well as small overseas targets.

    “This merger of equals reinforces how the need to compete with some of the larger technology/media companies, including Google and Facebook, is increasing the need for scale at the agency level,” said Evan Klein, Managing Director at Berkery Noyes.

    M&A volume in the Consumer Publishing segment increased 27 percent in third quarter 2013. There were several notable newspaper transactions during the quarter that were completed by individual billionaires. Jeffrey Bezos, the founder of Amazon.com, acquired The Washington Post Company for $250 million. Several weeks prior to this, John Henry, the principal owner of the Boston Red Sox, acquired The Boston Globe from The New York Times for $70 million. These prices reflect the difficulties facing newspaper publishers as traditional advertising, a decline in print subscribers, and the shift toward digital content upends the sector’s historical business model. Meanwhile, Warren Buffet has shown an interest in acquiring local newspapers, as indicated by several of Berkshire Hathaway’s deals throughout the last two years.

    Wednesday
    Jul242013

    MEDIA AND MARKETING DEAL VOLUME STAYS CONSTANT AS AGGREGATE VALUE DECLINES

    Berkery Noyes has issued its Media and Marketing report for half year 2013. Deal volume stayed about the same during the last six months, decreasing slightly from 800 to 794 transactions. Total value declined 37 percent, from $47.37 billion to $29.45 billion. The median revenue multiple increased from 1.6x to 2.1x, which was its highest level on a half year basis throughout the past 30 months. However, the industry’s median EBITDA multiple held constant at 8.3x.

    Consumer Publishing had the largest half-to-half year rise in volume, increasing 21 percent since second half 2012. At the same time, M&A volume in the Entertainment segment improved 11 percent. The amount of deals in the B2B Publishing and Information segment increased five percent, rising from 86 to 90 transactions in the prior half year period.

    The Marketing segment’s volume experienced a slight uptick over the past six months, totaling 252 deals in first half 2013. WPP continued its acquisition spree with nine transactions during this timeframe. Meanwhile, the largest deal in the digital marketing subsector in first half 2013 was Accenture’s acquisition of Acquity Group for $285 million, which represented a 2.0x revenue multiple and 13.9x EBITDA multiple.

    “Not surprisingly, many acquirers are placing an emphasis on analytics that can increase the effectiveness of their marketing efforts,” said Evan Klein, Managing Director at Berkery Noyes. “The desire to offer a more comprehensive suite of solutions, including those with a social and mobile component, is helping to spur M&A activity.”

    Monday
    Apr152013

    MEDIA AND MARKETING M&A VOLUME STAYS CONSTANT IN Q1 2013

    Berkery Noyes has issued its Media and Marketing M&A report for Q1 2013.

    According to our latest research, transaction volume remained relatively constant over the past three months, rising two percent compared to Q4 2012. Deal value showed a decline of 68 percent, from $25.6 billion in Q4 2012 to $8.2 billion in Q1 2013. Eight of the top ten largest acquisitions in 2012 occurred in either the third or fourth quarter, which contributed to this steep quarterly value decrease. 

    Transaction activity in the B2B Publishing segment increased ten percent on a quarter-to-quarter basis. Meanwhile, M&A in the Entertainment Content segment increased 13 percent in Q1 2013.

    One new Internet Media acquirer during Q1 2013 was Pinterest. The social networking site acquired Punchfork, a social culinary website, within the segment. This was the company’s first acquisition since its launch in 2010. Other Internet Media transactions by noteworthy acquirers were Amazon.com’s acquisition of book recommendation site Goodreads, Facebook’s acquisition of blogging website Storylane, and AOL’s acquisition of tech review website gdgt.

    As for the industry’s Marketing segment, transaction volume increased eight percent in Q1 2013. This rise came in the aftermath of a 19 percent decline between Q3 2012 and Q4 2012. Content marketing is one key trend driving innovation in the digital subsector, as is the growing emphasis being placed on experiential marketing solutions.

    “We expect to continue seeing an ongoing shift in advertising spend from print-based to digital media,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “One of the ultimate goals of doing so is to improve the lead generation process through greater personalization, more targeted messaging, and better measurement of the end results.”

    Tuesday
    Jan082013

    EXHIBITIONS, CONFERENCES, AND SEMINARS SEGMENT DRIVES M&A IN THE MEDIA AND MARKETING INDUSTRY

    Berkery Noyes has released its Media and Marketing Industry M&A Report for Full Year 2012.

    Deal volume increased three percent on a year-to-year basis, from 1,570 transactions to 1,611 transactions, and rose 22 percent relative to 2010. Aggregate transaction value showed a gain of 17 percent, from $65.41 billion in 2011 to $76.23 billion in 2012.

    Transaction volume specifically within the Exhibitions, Conferences, and Seminars segment increased 82 percent compared to 2011. The most active segment acquirer during the three years covered in the report was United Business Media Limited (UBM) with 27 transactions. In addition, financial sponsors accounted for 18 transactions in the segment in 2012, as opposed to eight transactions in 2011. This represented 22 percent of the segment’s 2012 volume, a slight uptick from 18 percent the prior year.

    M&A activity in the Entertainment Content segment improved 18 percent from 2011 to 2012. This was driven in part by film studio related transactions, which increased 42 percent throughout the last twelve months. On a similar note, The Walt Disney Company’s acquisition of Lucasfilm for $4.10 billion in 2012 was the highest value Entertainment deal contained in the report.

    M&A in the B2B segment increased four percent from 2011 to 2012, with a median revenue multiple of 2.0x and a median EBITDA multiple of 9.0x. This was well above the overall industry’s median enterprise value multiples for the year.

    “The ongoing trend toward non-print based delivery has led to changing business models in some instances,” said Kathleen Thomas, Managing Director at Berkery Noyes. “This includes many along the spectrum from recurring revenue offerings to purely advertising based revenue ones. Nonetheless, strong original content is still king in the B2B marketplace, regardless of the delivery mechanism.”