Deals reach record high

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Despite the credit crunch and an increasingly wobbly economy, M&A activity in the media and information industries reached record highs in the first three quarters, according to a recent report by media investment bank Jordan, Edmiston Group Inc.

With 637 transactions valued at more than $95 billion combined, the first three quarters of this year have already matched all of 2006 in terms of the number of deals, while the deal value has handily surpassed last year's total of $60.6 billion.

"It's still a very strong market," said Richard Mead, managing director of Jordan, Edmiston, adding that the credit problems aren't having a negative effect on b-to-b media deals. "There's of lot of activity going on right now and plenty of deal flow," he said.

Although b-to-b media sellers and potential buyers are certainly cognizant of the problems facing credit markets, there is a "willingness on both sides of the table to get things done," Mead said.

Jim Casella, CEO of Case Interactive Media, a private equity company formed earlier this year, said he is currently bidding on four properties in the b-to-b media arena. "The leverage is different, but most b-to-b media deals are in the middle market and are not being exposed to [credit woes]," said Casella, who declined to name the properties his company is pursuing.

Through September, media and information deals were dominated by two sectors: marketing services and online media. There were 182 marketing and interactive services deals, up from 123 in the year-earlier period. The value of those deals jumped to $27.6 billion, from $15.6 billion. The number of online media deals rose to 232, from 136 in the year-earlier period, while the value of those deals grew to $8.3 billion, from $5.7 billion.

Although the number of deals for database information services fell to 22 from 35, the value rose to $21.3 billion, from $1.5 billion. The increase in value was driven largely by Thomson Corp.'s deal, announced in May, to buy Reuters for $17.2 billion.

Exhibitions and conferences also showed growth. There were 51 deals through the third quarter, up from 35 in the year-earlier period, while the value rose to $733 million, from $636 million.

The number of b-to-b magazine deals grew to 31 from 30, while the combined value fell to $3.1 billion, from $3.7 billion in the year-earlier period.

Mead said that despite enormous challenges, print is still an integral part of b-to-b publishers' portfolios. "I don't subscribe to the belief that b-to-b magazines are dead," he said. "It's a core in the relationship between buyers and sellers, and there will continue to be a role for magazines that are No. 1 or No. 2 in their markets."

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