Media M&A starting to show signs of life

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New York—Mergers and acquisition activity in the media arena showed some signs of life in the third quarter, according to a report released last week by Jordan, Edmiston Group.

In the first three quarters of this year, 466 deals worth a combined $16.4 billion took place in the media, information, marketing services and technology sectors, according to Jordan, Edmiston. Compared with the same period last year, the deal volume was down 30% and the deal value was off 42%.

Third-quarter results were more positive. Although deal volume fell 28.8% to 168 transactions in the third quarter of 2008, overall deal value increased 85%, jumping from $6.0 billion to $11.1 billion.

B-to-b magazine deals were not a bright spot, according to Jordan, Edmiston’s analysis. In the first three quarters of this year, deal volume declined to 20 transactions from 11 in the year-earlier period. Similarly, the transaction value declined to $51 million from $394 million.

The number of b-to-b magazine transactions fell to five, from nine in the year-earlier period. In the same time frame, the value of the deals tumbled to $34 million, from $47 million. However, the total value of deals for this year’s third quarter was double the value for the first two quarters combined. Two fairly sizable third-quarter deals—Asset International’s purchase of Strategic Insight and Roll Call’s acquisition of Congressional Quarterly—helped bolster the b-to-b magazine sector.

M&A activity in exhibitions and conferences showed similarly weak performance. For the first three quarters, the number of deals in the sector dropped to 29, from 40 in the year-earlier period. In the same time frame, the value plunged to $140 million, from $712 million.

In the third quarter, the number of deals in the exhibitions and conference sector fell to nine, from 12 in last year’s third quarter. The value of transactions tumbled to $62 million, from $265 million.

Jordan, Edmiston said that 80% of the media deals are being driven by strategic buyers, as many private equity companies, which drove most of the action up through 2007, are now focusing on making sure the balance sheets of their portfolio companies are in order. “There’s no question that strategic buyers are looking at better price opportunities to acquire innovative, new growth companies,” said Tolman Geffs, managing director of Jordan, Edmiston.

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