July 15, 2015 Last Updated 8:52 am

Berkery Noyes reports on first half M&A media activity: volume up slightly, value down 31%

NEW YORK, NY — July 14, 2015 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2015 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014.

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.This analysis excludes the proposed mega-merger of Time Warner and Charter Communications, which falls outside the report’s purview. 11 of the industry’s top ten highest value deals in second half 2014 reached the $1 billion threshold, as opposed to five in first half 2015. The median revenue multiple over the past six months decreased from 2.1x to 1.9x, while the median EBITDA multiple declined from 12.0x to 8.7x.

BN-mergersThe 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.

As for other sectors covered in the report, deal flow in the Consumer Publishing segment remained about constant. The segment’s highest value transaction in first half 2015 was Capmark Financial Group’s acquisition of Orchard Brands, a multi-brand family of 13 catalog and eCommerce brands that that serve the boomer and senior demographics, for $410 million. Other notable Consumer Publishing deals included New Media Investment Group’s acquisition of Stephens Media for $103 million and The Columbus Dispatch for $47 million; and Tribune Publishing’s acquisition of MLIM, the owner of the San Diego Union-Tribune, for $85 million. Another high profile consumer focused deal that spanned several segments was Sequential Brands Group’s acquisition of Martha Stewart Living Omnimedia, a diversified media and merchandising company, for $300 million.

The number of acquisitions in the B2B Publishing and Information segment fell 17 percent in first half 2015. This followed a 16 percent increase in second half 2014, which was the segment’s most active half year period during the past two-and-a-half years. Meanwhile, M&A volume in the Entertainment segment declined ten percent over the last six months. This marked a return to its average level over the preceding three half year periods.

Deal activity in the Exhibitions, Conferences, and Seminars segment saw a twelve percent improvement, from 43 to 48 transactions. This was the segment’s fourth consecutive half year increase and its peak for volume over the last 30 months. 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.”

Source: Berkery Noyes

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