Merger and acquisition activity in the media and marketing sectors was slow for most of 2009, but a surge at the end of the year is giving investment bankers optimism for 2010—even in the b-to-b media sector, which has been especially hard-hit by the economy.
“B-to-b ad spending is settling, and buyers see an opportunity to buy at the bottom of the market,” said Scott Peters, managing director at Jordan, Edmiston Group, a New York-based investment bank. “Ad spending is returning, and strong brands will remain viable b-to-b media franchises. Sell-side situations will continue to be driven by restructuring and overleveraged situations.”
In a report released this month, Jordan, Edmiston tabulated 615 transactions in the media, information and marketing services sectors in 2009 with a combined value of $32 billion. The number of transactions decreased 24% compared with 2008 and the value declined 11%.
However, M&A activity increased significantly in the fourth quarter of 2009. Jordan, Edmiston noted there were 149 fourth-quarter deals with a combined value of $15.4 billion, almost half of 2009's total deal value.
While the number of b-to-b media deals declined from 22 to 20 between 2008 and 2009, the combined value skyrocketed 753.4% to $3.6 billion, from $417 million. Most of the deal value stemmed from a single transaction, EQT Partners' $3.4 billion acquisition of Springer Science+Business Media in December.