July 15, 2014 MEDIA AND MARKETING DEAL VOLUME DECLINES SLIGHTLY AS VALUE RISES

According to Berkery Noyes’ latest Media and Marketing report, deal volume decreased three percent on a half year basis. Total value increased nine percent, from $45.80 billion to $49.78 billion. However, when contrasted with first half 2013, volume in first half 2014 increased four percent and value gained 70 percent. The median revenue multiple over the past six months declined from 2.0x to 1.4x, while the median EBITDA multiple moved slightly from 8.9x to 8.3x.

The segment with the largest half-to-half year increase in volume was Marketing, which rose seven percent. Marketing transactions accounted for 36 percent of the industry’s aggregate volume in first half 2014, a four percent uptick compared to second half 2013. In addition, deals in the digital marketing subsector represented 41 percent of the segment’s overall volume in first half 2014.

Transaction volume in the Consumer Publishing segment decreased ten percent over the past six months. This followed an 18 percent increase between first and second half 2013. The segment’s highest value transaction in first half 2014 was Apax Partners’ acquisition of Trader Media Group for $1.92 billion. After remaining nearly constant from first to second half 2013, the number of acquisitions in the B2B Publishing and Information segment fell 16 percent.

Of note, financial sponsors in first half 2014 accounted for 11 percent of aggregate Media and Marketing transaction volume but represented 31 percent of volume within the B2B segment.

“We expect to see more divestitures by global companies of declining print-based businesses and, among these, some established brands and franchises for which there exist attractive cross-platform or cross-market opportunities for acquirers with that expertise,” said Mary Jo Zandy, Managing Director at Berkery Noyes.

Deal flow in the Internet Media segment decreased eight percent relative to second half 2013. However, total value in the segment gained 41 percent. Notable Internet Media transactions in first half 2014 included Hellman & Friedman’s acquisition of Internet Brands for $1.1 billion and YouTube’s acquisition of Twitch Interactive for a reported $1 billion.