The credit crisis has begun to hurt mergers and acquisitions activity in the media and information sector, according to media investment bank Jordan, Edmiston Group's recently released “Third Quarter 2008 M&A Overview.”
“Banking and debt market upheaval and an incipient pullback in advertising spending have led to an overall slowdown in M&A,” the report said. The number of transactions has remained relatively steady in the media and information sector, with 636 deals completed in the first three quarters of 2007 and 619 deals completed in the first three quarters of 2008. The combined value of the transactions has plummeted, however, falling almost 70% to $26.7 billion in the first three quarters of this year from $87.6 billion in the same period of 2007.
The culprit for the drop in value appears to be the credit market, which has been blamed for holding up several deals. “Billion-dollar-plus leveraged transactions have largely gone on hold, such as the acquisition of Informa by a consortium of Blackstone, Carlyle Group and Providence Equity Partners,” according to the report.
Other deals that appear to be facing delays because of the credit market include the sale of Reed Business Information and the sale of Cygnus Business Media. While private equity funds, which depend on leverage, have slowed the pace of their acquisitions, strategic buyers have remained active. B-to-b magazine deals, however, showed declines in the number of deals (20 in the first three quarters of this year versus 31 in the year-earlier period) and in the combined value ($394 million through September versus $3.1 billion in the year-earlier period).
Deals in the exhibition and conference sector remained fairly steady, declining from 51 in the first three quarters of 2007 to 40 in the same period this year. The value of the deals declined to $712 million, from $733 million. M