Wednesday, June 08, 2011

Media M&A Reports

Investment advisory firm Jordan Edmiston reported their Q1 2011 review of M&A activity a few weeks ago (JEGI):
M&A transaction value for the media, information, marketing services and technology sectors reached $12 billion in Q1 2011, representing a 16% increase over Q1 2010. The first quarter of 2010 had seen an 83% surge in deal volume and a nearly seven time increase in transaction value over Q1 2009 levels. So, 16% growth in Q1 2011, off a large prior year base, reflects a healthy continuing M&A environment.

The interactive and technology markets accounted for an even greater share of activity, with the B2B and B2C Online Media & Technology, Marketing & Interactive Services, and Mobile Media & Technology sectors accounting for 75% of total deals in Q1 2011 vs. 70% in Q1 2010. The average deal size for these sectors rose as well, from $28 million in Q1 2010 to $47 million in Q1 2011.

Looking at the Top 10 Deals:
The interactive markets accounted for 7 of the 10 largest deals of the quarter, including the only multibillion dollar deal announced – eBay’s acquisition of GSI Commerce for $2.4 billion.

The other six announced interactive deals in the top 10 included:
  • Walgreen acquired, an online retailer of health and beauty products, for $409 million;
  • Tencent of China acquired RiotGames, a developer of premium online games, for $400 million;
  • acquired Radian6, a social media monitoring company, for $326 million;
  • AOL acquired Huffington Post, an online news and opinion web site, for $315 million;
  • GSI Commerce acquired Fanatics, a network of sports e‐commerce sites, for $277 million; and
  • Nordstrom acquired HauteLook, a private, limited‐time e‐commerce site, for $270 million.
Interestingly, two of the largest transactions of the quarter took place in the consumer publishing market, which has been a relatively quiet sector over the past few years:
  • Hearst Corporation’s acquisition of Lagardère’s magazine portfolio for $651 million; and,
  • Apax Partners’ acquisition of Yellow Media’s Trader Corp., a producer of consumer shopper publications, for $745 million.
The remaining deal in the top 10 for Q1 2011 took place in the fast‐growing healthcare market:
  • inVentive Health, owned by private equity firms Thomas H. Lee and Liberty Lane Partners, acquired i3, a pharmaceutical services company, for $400 million.
Additionally, Marlin & Associates also circulated their deals overview for June 2011 which takes a wider view of activity and has some nicer graphs if you like that sort of thing (Marlin).

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