M&A market starting to show signs of life

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Although there are signs of a thaw in media M&A activity, most media companies are not expected to make any major deals before year's end, according to Mike Klingensmith, managing director of media banker AdMedia Partners. “There's been a necessity [among media companies] to redo their capital structures. Everybody has been trying to put the fires out; so the focus has not been on M&A, except in distressed situations,” said Klingensmith, who spent 31 years at Time Inc., most recently as exec VP, before joining AdMedia Partners in April 2008 as senior adviser. “But I think it's a real thaw.” Klingensmith pointed to Adobe Systems' pending acquisition of Web analytics company Omniture for $1.8 billion and the bidding for Travel Channel (which could fetch up to $1 billion) as examples of how the media M&A marketplace is starting to pick up. He said that as the economy starts to recover, traditional media players with heavy exposure to print properties will continue to “become more digital” via acquisitions. “That would be something I definitely see toward the end of this year and on into next year,” he said. Klingensmith added that marketing services and online media properties remain the most attractive media assets to potential suitors. “Multiplatform companies that are principally print-driven are going to have to show more tangible evidence of an uptick in advertising before those [types of] deals happen,” he said. —M.S. DO: Buyers should look for opportunistic situations now because prices are right—but it's a bit like finding a needle in a haystack. DON'T: Sellers should not assume the media business is going to be ailing forever. Eventually, companies are going to have to get back in the business of marketing their products.
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