2018-07-10 Berkery Noyes Releases Media and Marketing Industry M&A Report for Half Year 2018

NEW YORK — July 10, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2018 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity during the first half of 2018 and compares it with the four previous six-month periods from 2016 to 2017.

Deal volume declined ten percent on a half year basis. The number of acquisitions completed by financial sponsors increased nine percent whereas strategic volume decreased 13 percent. Total value fell 55 percent, from $117.14 billion to $53.11 billion. Of note, two of the industry’s top three largest transactions in 2017 occurred during the second half of the year and accounted for almost one-half of overall 2017 value. Aggregate value in first half 2018 rose nine percent relative to first half 2017.

One high profile, ongoing bidding war that wasn’t included in the report involves 21st Century Fox’s entertainment assets. Disney’s most recent bid of $71.3 billion received antitrust approval from the Department of Justice in late June. Comcast previously made an offer of $65 billion, which followed Disney’s initial offer of $52.4 billion.

The median revenue multiple over the past six months saw an uptick from 1.2x to 1.4x, while the median EBITDA multiple remained nearly constant at 10.0x. Over the last two-and-a-half years, deals in the $10-$40 million range received a median enterprise value multiple of 1.5x revenue, compared to 2.4x revenue for those in the $40-$80 million range and 3.2x revenue for those in the $80 million and above range.

Transaction activity in the Internet Media segment improved 19 percent in first half 2018, making it the sector with the largest gain during the half year period. Notable Internet Media related transactions thus far in 2018 included SilverLake’s announced acquisition of ZPG, the owner of property website Zoopla, for $3.34 billion; Recruit Holdings’ acquisition of Glassdoor, a job listings and recruiting marketplace that is known for its anonymous employee reviews, for $1.2 billion; and Momo’s announced acquisition of Tantan, a Chinese dating app, for $775 million.

Volume in the Marketing segment, which for the purposes of this report excludes pure software based companies, decreased 21 percent in first half 2018. High profile Marketing transactions thus far in 2018 included Ocelot Partners’ announced acquisition of Ocean Outdoor, a digital out-of-home advertising company, for $280 million; and GoDaddy’s announced acquisition of Main Street Hub, a social media marketing platform, for $125 million (plus a $50 million earnout).

M&A activity in the Entertainment segment declined 12 percent on a half year basis. Notable segment transactions in first half 2018 included Sony’s announced acquisition of EMI Music Publishing for $3.39 billion; Zynga’s acquisition of Gram Games, a mobile game developer with studios in London and Istanbul, for $250 million; and THQ Nordic’s acquisition of Koch Media, an independent producer and marketer of digital entertainment products and accessories, for $148 million.

Regarding other selected sectors covered in the report, transaction activity in the Consumer Publishing segment declined 20 percent during the half year period while volume in the Exhibitions, Conferences, and Events segment decreased 14 percent.

Meanwhile, the number of acquisitions in the B2B Publishing and Information segment increased 14 percent in first half 2018. Notable B2B related deals year-to-date included a Blackstone Group led consortium’s announced acquisition of a 55 percent stake in Thomson Reuters Financial & Risk division for $11 billion; IHS Markit’s announced acquisition of Ipreo Holdings, which offers financial market information and software with a focus on alternative assets, for $1.86 billion; TransUnion’s acquisition of Callcredit Information Group, a credit bureau headquartered in the U.K., for $1.43 billion; and Cisco’s acquisition of Accompany, which offers an AI platform that provides real-time profiles on every Fortune 500 CEO, for $270 million.

“Media companies that have diversified offerings and are showing year-over-year growth are attractive to both strategics and private equity,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “Moreover, B2B information producers continue to be attractive acquisition targets when they provide data and information on a subscription basis.” Zandy continued, “Users are demanding high quality content, accessibility through many mediums, and more interaction with content creators. All of these factors are driving interest in business information providers.”

A copy of the MEDIA AND MARKETING INDUSTRY M&A REPORT FOR HALF YEAR 2018 is available at the Berkery Noyes website.