Berkery Noyes’ research showed that 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. The median revenue multiple declined from 1.8x to 1.3x, while the median EBITDA multiple fell from 9.8x to 7.5x. Strategic acquirers represented 87 percent of the Media and Marketing Industry’s deal volume, which was the same percentage as in 2011.
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.
The most active 2012 acquirer in the overall Media and Marketing Industry was WPP Group. WPP’s largest transaction was its announced acquisition of AKQA, a digital agency headquartered in San Francisco, for $540 million. Aside from this deal, most of its targets were either digital marketing startups or international companies.
The number of transactions within the Marketing segment, at 504, remained nearly constant from 2010 to 2011. The digital marketing subsector specifically increased 34 percent, from 172 to 230. As for the Internet Media segment, there were four deals that reached the $1 billion threshold in enterprise value, compared to just one in 2011. Therefore, although transaction volume in the segment was down 10 percent, the segment’s transaction value rose 81 percent. One of thelargest Internet Media transactions in 2012 was Permira’s acquisition of Ancestry.com, a portfolio company of Spectrum Equity, for $1.44 billion in the fourth quarter.
Deal volume in the Consumer Publishing segment rose 20 percent over the last twelve months. However, the segment’s value fell 38 percent, indicating a greater number of small and mid-sized acquisitions. M&A activity in the B2B segment increased four percent during the same timeframe, 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.”
A copy of the MEDIA AND MARKETING INDUSTRY M&A REPORT FOR FULL YEAR 2012 is available at the Berkery Noyes website.
Berkery Noyes specializes in mergers and acquisitions advisory, debt and equity financing, and financial consulting services for companies in the $10 million to $500 million range, a market that is enjoying a surge in activity. The firm’s research teams publish acquisition activity in the respective sectors they follow on MandAsoft.com.
About Berkery Noyes
Berkery Noyes is an independent investment banking advisory firm servicing the information industry. Since its founding by Joseph W. Berkery in 1983, the firm has worked with corporate clients to grow through acquisition, divest non-core assets, and maximize shareholder returns through strategic transactions and restructurings. For private owners, Berkery Noyes helps create liquidity and execute timely exit strategies that achieve their personal and professional objectives. Securities services are offered through Berkery Noyes Securities, LLC. For more information, visit www.berkerynoyes.com.