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Buyers being more selective

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With the media M&A market continuing its torrid pace—and prices getting a bit frothy—buyers are becoming more discriminating, said Carolyn Armbrust, manager of Willamette Management Associates, which provides valuations for middle-market companies.

"Private equity firms and hedge funds are looking for independent valuations to give them a reality check and to further satisfy investors that they're not getting caught up in the deal," Armbrust said.

With price multiples heating up for media properties, buyers must take a closer look at current risk factors, she said. Foremost among these is the growing wedding of media and technology.

"With media intertwined with technology, the risks are much higher in terms of quicker obsolescence of revenue streams," Armbrust said. "Do buyers go after blogs, e-commerce? Or should they wait for the next hook? They have to ask themselves: Do I buy for the short term or the long term?"

In previous bullish M&A markets, before the Web became such a force, buyers were looking for solid cash flows and growth, Armbrust said. But with the explosion in the number of electronic media channels, buyers "have to take a much harder look at all the specific opportunities" afforded by online assets, she said.

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