Media M&A Activity Resilient but Starting to Slow
Merger and acquisition activity in the marketing, advertising and digital media industries proved surprisingly resilient during the first two months of the third quarter of 2008, but began to soften in September, according to investment bankers Petsky Prunier.
In its Third Quarter Deal Notes, Petsky Prunier tracked 168 transactions worth a total of $11.1 billion in estimated transaction dollar volume in 3Q08. While the total number of transactions was down 29% from 3Q07 and 12% from 2Q08, total transaction dollar volume was up 30% and 68%, respectively.
Similar to 3Q07 and for the second quarter in a row, the Digital Media segment generated the largest share of industry activity, with 66 transactions totaling $5.1 billion, followed by Information, which recorded six deals for a total of $3.3 billion.
Digital Media also led in total number of transactions announced with 66, down 20% from the same quarter last year, but up 74% from 2Q08.
Although Marketing Technology was 3Q08’s second most active in terms of deals announced, the numbers declined in the segment, with transaction volume down 27% from 2Q08 and dollar volume down for the third straight quarter.
Overall, strategic buyers generated the largest portion of total transaction value, with 80 deals worth $9.2 billion. In the first nine months of 2008, the 11 most active strategic acquirers announced 53 transactions. Venture capital companies completed 80 transactions during 3Q08 worth approximately $757 million. Private equity firms chose their targets carefully in 3Q08 and completed only eight buyouts, a reflection of the weak credit environment.
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