Conditions right for making deals

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Now is the right time for media companies that have been considering selling properties to put them on the market, said Baran Rosen, president of Whitestone Communications, a media advisory company. "This is the best M&A environment the industry has had since the economy went south; all the key factors have lined up," he said.

Most notable, interest rates are low and banks are loosening their guidelines for lending. "During the recession, banks were only loaning three times EBITDA, now it's up to five times," Rosen said. "This gives sellers great leverage and enables buyers to make offers in the seven- or eight-times EBITDA range."

These financial conditions have created greater competition for properties on the market. "Some of the most recent deals, specifically Thomson Media, have resulted in outright bidding wars," Rosen said.

Despite the increased competition, there has been little interest from strategic buyers-except those with additional financial backing-and it appears there won't be much more in the near future, Rosen said.

"The McGraw Hills and Reed Elseviers don't seem to have much of an appetite for acquisitions," he said. "But financial buyers-especially private equity groups-should continue to drive record numbers of deals in at least the short term."

-Roger Slavens

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