New year brings new deals, M&A optimism

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Kathleen Thomas, managing director of Berkery, Noyes & Co., is optimistic about M&A activity in b-to-b media this year.

“We're seeing a lot of strategic deals in the small-to-midsize range,” she said. “The appetite is coming back slowly but surely.”

Thomas has a right to be optimistic. Halfway through January, her firm has already participated in two b-to-b media deals. It represented LRP Publications, which publishes Human Resource Executive and Risk & Insurance, in the sale of its public employment group and bankruptcy/banking products group to Thomson Reuters. It also represented Neil Rouda in the sale of his stake in MedTech Media, a company he founded in 2003, to Healthcare Information Management System Society.

In one of many reports issued by investment banks earlier this month, Berkery, Noyes & Co. reported that the number of deals increased to 687 last year, a 27% bounce compared with 2009. However, the value of those deals tumbled to $24.0 billion, a 35% decline, due primarily to several huge deals in 2009 such as Thomson Corp.'s $17.58 billion merger with Reuters Group.

Petsky Prunier reported that M&A transactions in the marketing, information and digital media/commerce sector increased 49% last year to 1,019. In the same period, aggregate deal value rose 88% to $51.5 billion.

Jordan, Edmiston Group's report found that the number of deals increased to 845 last year, a 39% jump compared with 2009. The value of those deals increased to $43.3 billion, also a 39% improvement.

Jordan, Edmiston's report revealed mixed results in the b-to-b arena. The number of b-to-b online media and technology deals totaled 59 last year, an increase of 11% over 2009. In the same time frame, deal value in that sector jumped 88% to $2.5 billion.

The exhibitions and conferences deal market, however, was cool last year, with the number of transactions dropping 34% to 23, and the value of those deals falling 22% to $129 million.

The number of traditional b-to-b media deals increased to 37 last year, up 85%. However, the aggregate deal value plummeted to $534 million, a drop of 85%. Much of that value came from a single deal: United Business Media's reported $287 million acquisition of Canon Communications.

When the UBM-Canon deal took place in September, some industry observers hoped that it was a sign the b-to-b media market was revving up. But it's clear that small deals—often driven by debt concerns—continued to be the norm.

Nonetheless, Berkery, Noyes' Thomas believes the deals may get larger as this year progresses. “I think this year will be dominated by strategic deals and not necessarily small ones,” she said. “The deal size is creeping up.”

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