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Marketing merger & acquisition activity surges

BIG FISH, SMALL FISH

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One of the most active M&A players has been agency holding company MDC Partners. This month MDC acquired a majority interest in New York-based experiential marketing company Relevent. That deal followed on the heels of MDC's acquisitions of experiential marketing company TEAM and public relations companies Sloane & Co. and Allison & Partners. Another active buyer has been database marketing agency Merkle, which acquired loyalty marketing company Metzner Schneider Associates and CognitiveDATA, a company that focuses on database accuracy and hygiene. And then there's Google. The search giant has logged 23 acquisitions since January 2009. With its purchases this month of online payment processing company Jambool (for $70 million) and social networking website development company Slide (for $182 million), Google continues its aggressive quest to be a social media player. “Clearly the large companies are investing in entities that will improve or provide new opportunities for the tools they're already providing to customers,” Lefteroff said. As for the average funding rounds being smaller than they were in 2007, Lefteroff said it's symptomatic of lingering caution. “Investors want to see that there is a fundamental business model there, a pathway to liquidity,” he said. “It doesn't take very long to see if there's traction. The ones with it continue to get funding; the others get killed off pretty quickly.” New York M&A company Palazzo Advisory and Acquisition currently has three to five deals expected to close by year's end, according to company president and founder Philip Palazzo. “Today there are many more buyers in the marketing services space,” Palazzo said. “Five to eight years ago it primarily was the large advertising holding companies acquiring smaller shops. Today, we count no fewer than 50 private equity groups that have marketing services companies in their portfolios. “There are many more companies with interest in marketing services,” he said. M
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