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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Vineet Asthana (8)

    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.”

    Monday
    Oct192015

    ONLINE AND MOBILE DEAL VOLUME RISES ON A YEAR-OVER-YEAR BASIS

    Total volume in Berkery Noyes’ Online and Mobile report for third quarter 2015 declined seven percent on a quarterly basis, from 713 to 663 transactions. Aggregate value fell 17 percent, from $45.5 billion to $37.7 billion. When compared to the first three quarters of 2014, the number of deals year-to-date rose 15 percent while value remained about constant.

    M&A activity in the E-Commerce segment decreased seven percent relative to the second quarter. However, this represented an eight percent rise year-to-date compared to same time period in 2014. The largest E-Commerce deal in third quarter 2015 and year-to-date was home shopping channel QVC’s acquisition of Zulily, an online retailer that primarily serves millennial moms, for $2.1 billion. Traditional retailers have also been looking to strengthen their online presence by making acquisitions with a focus on the millennial market. For example, department store chain Nordstrom completed a related deal in 2011 with the acquisition HauteLook, which offers flash discount sales, for $180 million.

    The number of mobile application deals, after remaining about constant from first to second quarter 2015, declined 13 percent in the third quarter with a total of 96 transactions. High profile acquirers in the mobile space during the third quarter included Adidas’ acquisition of Runtastic, a fitness tracking application, for $239 million; Accenture’s acquisition of Chaotic Moon Studios, a mobile software design and development studio; and Snapchat’s acquisition of Looksery, a face tracking and modification application, for a reported $150 million.

    Transaction volume in the Communications segment improved 42 percent, from 52 to 74 deals. One notable acquirer was Blackberry with the acquisition of Good Technology, a mobile security solutions business, for $425 million. Blackberry completed another industry deal in the first quarter with the acquisition of WatchDox, an enterprise document security company. This continues a steady pace of M&A activity for the smartphone manufacturer.

    Blackberry also completed several acquisitions in 2014 with Secusmart, a security voice and data encryption company; and Movirtu, a provider of virtual identity solutions. Regarding other high profile segment acquirers in third quarter 2015, Turner Broadcasting Systems acquired iStreamPlanet, which provides cloud-based video streaming technology, for $200 million; and Amazon Web Services acquired Elemental Technologies, a supplier of software-defined video solutions and over-the-top TV (OTT) content delivery.

    “As the decline in print advertising continues, we’re seeing certain publishers become acquisitive in the ad tech sector,” said Vineet Asthana, Managing Director at Berkery Noyes. “Programmatic buying, native advertising, and retargeting presents an opportunity for the traditional media players to reach their audiences on a variety of platforms. Moreover the ad tech space is getting crowded and should be ripe for consolidation moving forward. Acquirers in the middle market seem to be especially keen on picking up digital companies that have either a regional focus or differentiated technological offerings.” 

    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.”

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