Little letup in deal flow

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Despite the struggling economy, mergers and acquisitions in the media and information industries kept up a fairly strong pace in the first quarter, according to a recent report by media investment bank Jordan, Edmiston Group. Among the 11 media and information industries tracked by Jordan, Edmiston, there were 202 transactions in the first quarter, down from 207 in the year-earlier period. However, the combined deal value rose 4.7% to $13.4 billion, from $12.8 billion. The demand for exhibitions, conferences and online media properties continues to grow, while interest in print properties wanes. For example, the number of trade magazine deals in the first quarter fell to five from nine, while the deal value dropped to $305 million from $634 million. “Many of the largest b-to-b media companies traded over the past few years, including Penton, Advanstar, ALM, Incisive Media and Nielsen [formerly VNU], so we expect a period dominated by restructuring and smaller, tuck-in acquisitions,” according to the report. The number of deals involving exhibitions and conferences fell to 14 from 17, but the combined deal value grew 169% to $328 million, from $122 million. The number of online media deals grew to 77 from 72, while the deal value jumped 76%, to $3 billion from $1.7 billion. AOL's $850 million acquisition of Bebo helped lift the deal value in this year's first quarter. So, too, did strategic b-to-b media companies that have invested in new-media properties to retool their businesses, including Questex Media's acquisition of FierceMarkets. Although the economy has been sluggish this year, both strategic b-to-b media companies and private equity funds are still interested in making deals, said Richard Mead, a managing director at Jordan, Edmiston. “There's still a lot of consolidation to go in virtually all of the sectors.” Mead added that he expects media M&A volume in 2008 to finish up when compared with last year, which saw 838 transactions with a combined value of $109 million,up 32% and 79%, respectively, from 2006. “Companies can't miss opportunities to buy quality assets just because the economy is somewhat challenged,” Mead said. A potential harbinger for b-to-b media deals will be the sale of Reed Business Information, which parent Reed Elsevier put in play in March. The portfolio, which includes Broadcasting & Cable and Variety among more than 80 b-to-b publications, is expected to fetch up to $2.5 billion if it's sold as a unit. Rumors swirled soon after RBI was put on the block that a few U.K.-based private equity companies, including Apax Partners, Guardian Media Group and Permira, were interested in acquiring RBI, but nothing has materialized. “No one is going to buy the whole thing,” said Mark Edmiston, a managing director at media investment bank AdMedia Partners, adding that he's confident there will be buyers for nearly all the media properties in RBI's portfolio. “But one or two magazines may not make it,” he said. M
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