NEW YORK — October 5, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2018 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity during the three-month period and compares it with data for the six previous quarters.

M&A volume stayed about the same on a quarterly basis. This followed a 14 percent rise in the second quarter. Aggregate value remained nearly constant over the past three months at $26.8 billion. Regarding valuations, the median revenue multiple from 2017 through the first three quarters of 2018 increased from 1.5x to 1.8x, while the median EBITDA multiple improved from 9.7x to 10.7x.

Deal activity in the Marketing segment, which for purposes of this report excludes software-based transactions, increased 25 percent during the third quarter. Notable segment deals during the third quarter included Interpublic Group of Companies’ announced acquisition of Acxiom Corporation’s Marketing Solutions Business for $2.3 billion; and Mill Point Capital’s announced acquisition of Affinion Insurance Solutions, a provider of marketing and insurance administration expertise to financial institutions and others, for $550 million.

Transaction volume in the Internet Media segment declined seven percent during third quarter 2018. The segment’s largest deal in the third quarter was Sirius XM Holdings’ announced acquisition of Pandora Media, a music discovery platform that offers streaming on-demand music services, for $2.8 billion.

The number of transactions in the B2B Publishing and Information segment decreased 22 percent on a quarter-to-quarter basis, from 51 to 40 acquisitions. This followed a 49 percent gain in the second quarter. The segment’s largest deal during the third quarter was the announced acquisition of Dun & Bradstreet by an investment consortium that includes Thomas H. Lee Partners and CC Capital, for $6.7 billion. Dun & Bradstreet provides commercial data, analytics, and insights for businesses. Of note, the B2B segment was responsible for the industry’s two largest acquisitions year-to-date, both of which were completed by financial sponsors.

“Many B2B media organizations are seeking to capture a larger share of marketing spend by providing a host of services to their clients,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “As B2B media create new product and service offerings, their clients – the B2B marketers – continue to divert a growing share of their marketing budget to new marketing services. These offerings are a means to augment revenue.”

Deal flow in the Consumer Publishing segment declined 21 percent over the past quarter, from 33 to 26 acquisitions. One notable segment transaction in third quarter 2018 was Marc and Lynne Benioff’s announced acquisition of Time Magazine for $190 million. This continues a trend of billionaires making their mark in the media industry. One such example was Tronc’s sale of The Los Angeles Times to Patrick Soon-Shiong of Nant Capital for $590 million earlier this year. Looking back further, Amazon’s founder Jeff Bezos acquired The Washington Post Company for $250 million in 2013. Also in 2013, John Henry, the principal owner of the Boston Red Sox, acquired The Boston Globe from The New York Times for $70 million. Meanwhile, Warren Buffet has shown an interest in acquiring local newspapers throughout the last few years, as indicated by several of Berkshire Hathaway’s deals.

As for additional areas covered in the report, volume in the Broadcasting segment stayed nearly constant on a quarterly basis. One notable segment deal during the third quarter included Telia Company’s acquisition of Bonnier Broadcasting, one of the Nordic region’s largest television companies, for $1 billion. After almost doubling in the second quarter, M&A activity in the Exhibitions, Conferences, and Events segment saw volume decrease 24 percent in the third quarter, from 37 to 28 deals.

The Entertainment Content segment underwent an 11 percent decline in volume during the quarter, from 55 to 49 deals. This followed a 31 percent improvement in the second quarter. Notable Entertainment related transactions in third quarter 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 iQIYI’s acquisition of Skymoons, a China-based developer of online and mobile games, for $189 million.

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