Marketing sees M&A surge

06 January 2012

NEW YORK: The number of mergers and acquisitions climbed dramatically in the media and marketing sectors last year, suggesting a consolidation trend in the wake of the financial crisis.

Berkery Noyes, the investment bank, reported that the value of M&A activity in these categories reached $54bn in 2011, compared with totals of $38bn in 2010 and $54bn in 2009.

The volume of takeovers and amalgamations between firms also rose from 1,225 in 2010 to 1,409 in 2011, and from 938 in 2009.

Evan Klein, Managing Director at Berkery Noyes, said: "The media and marketing industry is continuing its strong recovery from a slow fourth quarter in 2010."

"Marketing services and digital media companies have all benefited from a large increase in internet advertising revenues in 2011, and look to be promising segments for driving M&A activity."

By sector, the marketing industry saw the biggest increase in activity, as the 428 transactions conducted during 2011 marked a 29% expansion from the 332 announced in 2010.

The internet media category has seen the greatest amount of deals in each of the last three years, with around 430 deals in 2011, up from around 350 in 2010.

In all, Berkery Noyes tracked 3,572 deals from 2009–11, with a cumulative value of $120bn. The largest single deal during this period was Comcast's $22.9bn purchase of NBC Universal, announced in 2009 and closing last year.

The most valuable transaction getting underway in 2011 was West Australian Newspapers' $4.2bn takeover of Seven Media Group from private equity group Kohlberg Kravis Roberts & Co.

Other significant deals last year were the acquisition of Warner Music by Access Industries for $2.9bn, and the $847m purchase of Synovate by Ipsos in the market research sector.

Publicis Groupe, the French advertising holding group, posted the highest number of acquisitions, 39, from 2009-11, including 24 that were either announced or closed last year.

In volume terms, 88% of deals in this period were strategic moves by industry players, and 12% involved private equity, venture capital or other investment firms. These figures hit 80% and 20% respectively in value terms.

Data sourced from Berkery Noyes; additional content by Warc staff