2019-01-08 Berkery Noyes Releases Media and Marketing Industry M&A Report For Full Year 2018

NEW YORK — January 8, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2018 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity in the Media and Marketing Industry during 2018 and compares it with data covering 2016 and 2017.

Deal volume decreased 11 percent on a year-to-year basis. Aggregate value fell 31 percent, from $159.15 billion to $109.05 billion. In terms of valuations, the median revenue multiple rose from 1.5x to 2.0x, while the median EBITDA multiple improved from 9.7x to 10.6x. Over the past three years, deals in the $10-$40 million range received a median enterprise value multiple of 1.5x revenue, compared to 2.6x revenue for those in the $40-$160 million range and 3.3x revenue for those in the $160 million and above range.

Regarding specific industry sectors, the Internet Media segment saw a two percent decline in deal activity. Notable Internet Media transactions during 2018 included Sirius Holding’s announced acquisition of Pandora Media, a music discovery platform that offers streaming on-demand music services, for $2.81 billion; Apax Partners’ announced acquisition of Trade Me, an online marketplace and classified advertising platform based in New Zealand, for $1.8 billion; and WeddingWire’s announced acquisition of XO Group, which provides content, tools, products, and services for planning weddings, for $810 million.

The Marketing segment, which for the purposes of this report excludes pure software-based companies, experienced a five percent decrease in volume. Notable segment transactions over the past twelve months included Interpublic Group of Companies’ acquisition of Acxiom Marketing Solutions for $2.3 billion; JCDecaux’s announced acquisition of APN Outdoor Group, an Out-of-Home media company, for $901 million; and Mill Point Capital’s acquisition of Affinion Insurance Solutions, a provider of marketing and insurance administration expertise to financial institutions and others, for $550 million.

M&A activity in the Entertainment segment declined 13 percent year-over-year. High profile segment deals in 2018 included Pearl Abyss’ announced acquisition of CCP Games, a developer of multiplayer online games that is known in particular for EVE Online, a massively multiplayer online role-playing game (MMORPG), for $425 million; AMC Networks’ announced acquisition of RLJ Entertainment, a premium digital channel company that serves audiences primarily through its over-the-top (OTT) branded channels, for $274 million; and Zynga’s acquisition of Gram Games, a mobile game developer with studios in London and Istanbul, for $250 million.

Deal flow within the B2B Publishing and Information segment declined eight percent on a yearly basis, which was about the same as its 2016 level. Notable B2B segment transactions included Blackstone Group’s announced acquisition of a 55 percent stake in Thomson Reuters Financial Risk Division for $11 billion; an investment consortium’s announced acquisition of Dun & Bradstreet, a commercial data, analytics, and insights business, for $6.66 billion; IHS Markit’s acquisition of Ipreo Holdings, which offers financial market information and software with a focus on alternative assets, for $1.86 billion; and TransUnion’s acquisition of Callcredit Information Group, a credit bureau headquartered in the U.K., for $1.43 billion.

“Original content – unique, must-have and timely – is still king in the market,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “However, more publishers have begun to see the importance of delivering content through multiple channels. The most successful business models for content continue to be those with recurring revenue regardless of delivery type.”

As for other select sectors covered in the report, volume in the Consumer Publishing segment fell 27 percent over the past year, from 165 to 121 transactions. This followed a 15 percent increase from 2016 to 2017. Notable Consumer deals in 2018 included Vivendi SA’s announced acquisition of Editis, the second largest publishing group in France, for $1.03 billion; Tronc’s sale of The Los Angeles Times to Patrick Soon-Shiong of Nant Capital for $590 million; and Marc and Lynne Benioff’s announced acquisition of Time Magazine for $190 million. Meanwhile, the number of deals in the Exhibitions, Conferences, and Events segment decreased 19 percent, from 144 to 116 acquisitions. This followed a 14 percent increase from 2016 to 2017.

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