Media and Marketing M&A Soars in 2012

Analysts Expect Investment, Mergers and Acquisitions Activity to Remain Robust in 2013.

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There were more mergers and acquisitions in media and marketing this year for a great total value, marking the sector's third consecutive year of M&A growth, according to a new report from investment bank Jordan Edmiston Group.

M&A transactions value chart

The number of deals jumped to 1,351 from 903 last year, while the total value of deals increased more modestly, to $74.7 billion from $52.2 million, as the value per deal dropped to $55.2 million from $57.8 million.

Major deals in 2012 included Dentsu's agreement to buy Aegis Group for $4.9 billion, Facebook's pact to acquire Instagram for $1 billion,'s purchase of Buddy Media for $745 million and WPP's acquisition of AKQA for $540 million.

Advances in marketing technology have produced numerous viable new companies, and potential acquirers have money to burn, according to Tolman Geffs, co-president at Jordan Edmiston. "Innovation, especially in media marketing and services, continues at an amazing pace," Mr. Geffs said. "You wind up with a great number breaking new ground in more efficient digital market and commerce services. On the demand side, both corporate and financial acquirers are sitting on records amounts of cash."

The threat of higher taxes in 2013 was another catalyst for getting deals done now, Mr. Geffs said, noting that his firm closed five deals just in the week before Christmas.

M&A activity chart
JEGI transaction database

Activity will grow again in 2013 after a quiet first few months, Mr. Geffs predicted. Companies that have achieved between $30 million and $50 million in revenue will be prime acquisition targets, he said.

A greater concentration of companies will be a positive for the media and marketing industry, according to Mr. Geffs. "Advertising is the fuel driving the media industry, and continued innovation through investment and M&A will enable the ability for more media," he said.

Business-to-business media was the sector with the largest growth in M&A activity as the number of deals increased 143%, to 34 in 2012 from 14 in 2011, according to Jordan Edmiston. The value per deal for consumer magazines plummeted, to $6.4 million from $100 million per deal a year earlier.

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