The number of b-to-b magazine deals fell from 93 in 1999 to 42 last year. The value of the deals dropped from nearly $4 billion in 1999 to about $2.1 billion in 2000.
Despite the drop in magazine deals, the overall value of M&As in b-to-b media rose by more than 50% last year, up from $6.5 billion in 1999 to $9.8 billion. The increase was driven by a handful of big money deals, including CNET Networks Inc.’s $912 million acquisition of Ziff-Davis Inc.’s remaining assets and Primedia Inc.’s $690 million purchase of About.com Inc.
Overall, buyers spent $49.4 billion to acquire 362 media properties in the U.S. in 2000, a 9.4% jump over the $45.1 billion they spent to buy 384 properties in 1999. M&A activity reached a peak in the first quarter of last year, with 118 deals.
The number of deals involving b-to-b online media rose from 28 in 1999, valued at about $1 billion, to 43 in 2000, valued at more than $2 billion, indicating the growing appetite for Web properties.
"Many of the midsize companies have been consolidated into the larger ones, so there were fewer magazine deals in the $250 million range [last year]," said Wilma Jordan, CEO of Jordan, Edmiston and JEGI Capital L.L.C. But with debt markets loosening, Jordan anticipates a rebound in the number of magazine deals.
Other report highlights:
The M&A market in 2000 was characterized by fewer stand-alone media segment deals and by more cross-segment purchases compared with 1999.
Fourth-quarter spending in 2000 eroded, along with the decline in equity values and consecutive interest rate increases.
Major diversified media companies accounted for nearly all of the major deals in 2000, while private equity investors were less prominent than in 1999.