Report: B-to-b magazine M&A activity fell in 2000

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While overall media mergers and acquisitions were up nearly 10% in 2000, b-to-b trade magazine deals fell nearly 50%, according to a new report from investment banker The Jordan, Edmiston Group Inc.

The number of b-to-b magazine deals fell from 93 in 1999 to 42 last year. The value of the deals dropped from nearly $4 billion in 1999 to about $2.1 billion in 2000.

Despite the drop in magazine deals, the overall value of M&As in b-to-b media rose by more than 50% last year, up from $6.5 billion in 1999 to $9.8 billion. The increase was driven by a handful of big money deals, including CNET Networks Inc.’s $912 million acquisition of Ziff-Davis Inc.’s remaining assets and Primedia Inc.’s $690 million purchase of Inc.

Overall, buyers spent $49.4 billion to acquire 362 media properties in the U.S. in 2000, a 9.4% jump over the $45.1 billion they spent to buy 384 properties in 1999. M&A activity reached a peak in the first quarter of last year, with 118 deals.

The number of deals involving b-to-b online media rose from 28 in 1999, valued at about $1 billion, to 43 in 2000, valued at more than $2 billion, indicating the growing appetite for Web properties.

"Many of the midsize companies have been consolidated into the larger ones, so there were fewer magazine deals in the $250 million range [last year]," said Wilma Jordan, CEO of Jordan, Edmiston and JEGI Capital L.L.C. But with debt markets loosening, Jordan anticipates a rebound in the number of magazine deals.

Other report highlights:

• The M&A market in 2000 was characterized by fewer stand-alone media segment deals and by more cross-segment purchases compared with 1999.

• Fourth-quarter spending in 2000 eroded, along with the decline in equity values and consecutive interest rate increases.

• Major diversified media companies accounted for nearly all of the major deals in 2000, while private equity investors were less prominent than in 1999.

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