First-quarter M&A results mixed

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The first quarter was a mixed bag for media M&A activity, according to a pair of reports released last month by media investment banks. The volume of marketing and media M&A activity in the first quarter soared to 333 deals, a 51% increase over the year-earlier period, according to investment bank Jordan, Edmiston Group. But the aggregate value of those deals fell to $10.3 billion, a 7% drop. Jordan, Edmiston attributed the falloff in aggregate value to the lack of large deals. There was only one transaction of more than $1 billion during the quarter: Advent International and GS Partners' $3.3 billion acquisition of TransUnion in the database and information services sector. “Given the economy and lack of business confidence, M&A is still not as robust as it could be,” said Scott Peters, co-president of Jordan, Edmiston. “However, we are beginning to see an improvement in valuation multiples, which will help stimulate activity.” Driving the increase in volume in the first quarter was the marketing and interactive services sector, which saw 145 transactions, with a combined value of more than $3 billion. “The opportunity continues to be b-to-b publishers' leveraging their deep domain experience, their advertiser relationships and their relationship with their consumer to create unique marketing opportunities using traditional [and] new digital media as a platform,” Peters said. According to Jordan, Edmiston, the traditional b-to-b magazine sector saw the number of deals increase to nine, up 125% over a dismal first quarter 2011. In the same period, the value of b-to-b magazine deals increased more than fourfold, to $63 million. “Print will continue to be an important part of the mix of activity for advertisers, and what we're seeing is budgets are increasing and spend is coming back,” Peters said. The exhibitions and conferences sector also grew at a solid clip in the first quarter, with the number of deals increasing to 14, up from six in the year-earlier period, according to Jordan, Edmiston. Aggregate deal value in the exhibitions sector grew to $258 million. According to Berkery, Noyes & Co.'s “Q1 2012 Media and Marketing Industry M&A Trend Report,” the total number of deals in the media and marketing sector fell to 402 in the first quarter, a decline of 3.8% from the year-earlier period. In the same time frame, the aggregate deal value fell to $15 billion, a drop of 14.8%. Yet, compared with the fourth quarter of 2011, first-quarter deal activity increased 7%, while aggregate deal value was up 10%, according to Berkery, Noyes. “The flavor of the market is very healthy,” said Evan Klein, managing director of Berkery, Noyes. “The credit markets are open for the larger deals, and they're opening more for the small and middle-market deals than they have in the past.” Berkery, Noyes' first-quarter report said the exhibitions, conferences and seminars segment saw an 80% increase in deal activity, and the marketing segment saw a 14% increase.
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