BtoB Media Business - May 2012 - (Page 21)

M&A First-quarter results mixed Jordan, Edmiston and Berkery Noyes reports show decline in aggregate value of deals BY MATTHEW SCHWARTZ T he first quarter was a mixed bag for media M&A activity, according to a pair of reports released last month by media in- vestment banks. The volume of marketing and media M&A activity in the first quarter soared to 333 deals, a 51% increase over the year-earlier period, according to investment bank Jordan, Edmiston Group. But the aggregate value of those deals fell to $10.3 billion, a 7% drop. Jordan, Edmiston attributed the falloff in aggregate value to the lack of large deals. There was only one transaction of more than $1 billion during the quarter: Advent International and GS Partners’ $3.3 billion acquisition of TransUnion in the database and information services sector. “Given the economy and lack of business confidence, M&A is still not as robust as it could be,” said Scott Peters, co-president of Jordan, Edmiston. “However, we are beginning to see an improvement in valuation multiples, which will help stimulate activity.” Driving the increase in volume in the first quarter was the marketing and interactive services sector, which saw 145 transactions, with a combined value of more than $3 billion. “The opportunity continues to be b-to-b publishers’ leveraging their deep domain experience, their advertiser relationships and their relationship with their consumer to create unique marketing opportunities using traditional [and] new digital media as a platform,” Peters said. According to Jordan, Edmiston, the tradi- tional b-to-b magazine sector saw the number of deals increase to nine, up 125% over a dismal first quarter 2011. In the same period, the value of b-to-b magazine deals increased more than fourfold, to $63 million. “Print will continue to be an important part of the mix of activity for advertisers, and what we’re seeing is budgets are increasing and spend is coming back,” Peters said. The exhibitions and conferences sector also grew at a solid clip in the first quarter, with the number of deals increasing to 14, up from six in the year-earlier period, according to Jordan, Edmiston. Aggregate deal value in the exhibitions sector grew to $258 million. According to Berkery, Noyes & Co.’s “Q1 2012 Media and Marketing Industry M&A Trend Report,” the total number of deals in the media and marketing sector fell to 402 in the first quarter, a decline of 3.8% from the year-earlier period. In the same time frame, the aggregate deal value fell to $15 billion, a drop of 14.8%. Yet, compared with the fourth quarter of 2011, first-quarter deal activity increased 7%, while aggregate deal value was up 10%, according to Berkery, Noyes. “The flavor of the market is very healthy,” said Evan Klein, managing director of Berkery, Noyes. “The credit markets are open for the larger deals, and they’re opening more for the small and middle-market deals than they have in the past.” Berkery, Noyes’ first-quarter report said the exhibitions, conferences and seminars segment saw an 80% increase in deal activity, and the marketing segment saw a 14% increase.  A roundup of recent mergers and acquisitions Date Property Description Seller 3/12 Travel Blog Exchange Conference for travel bloggers 3/12 Nth Degree Provider of event marketing and management services 3/12 Hild Technology Services Provider of oil and gas pipeline data Source: Jordan, Edmiston Group Transaction Database, 2012 mediabusinessonline.com | May 2012 | Media Business | 21 Hild Technology Services IHS Travel Blog Exchange Nth Degree Buyer BlogWorld & New Media Expo Gen Cap America om O’Connor is managing director at media investment bank Berkery Noyes. Media Business: What do you think the level of media M&A activity will be for the rest of the year? T Tom O’Connor: There are several properties on the market right now, and I think you’ll see a pickup in deals over the balance of the year—not a huge spike, but a steady increase. The leveraged markets have improved (and) the LTM (last 12 months) numbers have gotten better. We’re seeing continued divestment by large strategic companies of noncore properties. In addition, there’s a lot of private equity ownership of b-to-b companies, and a lot of those firms are looking to exit their portfolio companies when the market gets a little better. MB: What about private equity players being more active in acquiring b-to-b media properties? O’Connor: Media companies that have diversified their revenue streams and have a high percentage of recurring revenue are very attractive to private equity buyers. Media companies that have events, publications, data, marketing services—and who are showing year-on-year growth—can be attractive to private equity. However, the buyers may not be the same private equity firms that historically were buying and selling b-to-b assets. Private equity has a tremendous amount of capital waiting to be invested, and many firms are taking a fresh look at the marketplace. —M.S. ANALYST INSIGHT Tom O’Connor Managing Director, Berkery Noyes ‘Steady increase’ in deals likely M&A M&A ACTION http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - May 2012

BtoB Media Business - May 2012
Contents
Peter Goldstone returns to Hanley Wood
Our ninth annual selection of cutting-edge leaders
Building databases grows list rentals
Sales & Marketing
M&A
Audience Development
Events
Production
People
Benchmarks
Incoming ABM chair takes stock of industry

BtoB Media Business - May 2012