January 21, 2015 MEDIA AND MARKETING DEAL VOLUME REMAINS CONSTANT AS VALUE RISES

Berkery Noyes’ Media and Marketing report for full year 2014 showed that deal volume remained nearly constant on a year-to-year basis. The number of private equity backed transactions increased 35 percent, from 156 to 211 deals. Aggregate deal value gained 22 percent, from $75.22 billion in 2013 to $91.45 billion in 2014. In terms of valuations, the median revenue multiple stayed the same at 2.0x, while the median EBITDA multiple rose from 9.7x to 10.9x.

The Marketing segment accounted for four of the industry’s top ten highest value deals in 2014, making it the best represented segment in the top ten list. In addition, the segment’s value more than tripled over the past year, from $7.44 billion to $24.10 billion. Along these lines there were four Marketing transactions above $2 billion in 2014, compared to one such deal in 2013.

The largest strategic Marketing deal during the year was Publicis Groupe SA’s acquisition of Sapient Corporation for $3.39 billion. This transaction, with a focus on expanding Publicis’ digital capabilities, comes in the aftermath of the company’s failed mega-merger with Omnicom. Sapient Corporation, through its digital marketing and advertising subsidiary SapientNitro, completed several deals in 2014 prior to being acquired by Publicis with the acquisitions of two creative agencies, Campfire and La Comunidad.

As for other markets covered in the report, the segment with the largest year-to-year rise in volume was Exhibitions, Conferences, and Seminars. This sector saw volume increase 16 percent, from 74 to 86 transactions. Notable segment deals in 2014 included United Business Media Limited’s acquisition of Advanstar Communications for $972 million and Informa’s acquisition of Hanley Wood Exhibitions for $375 million.

Deal flow within the B2B Publishing and Information segment fell seven percent on a yearly basis. However, the segment’s financially sponsored volume improved 62 percent, from 26 to 42 deals. In terms of the Consumer Publishing segment, deal volume declined 18 percent in 2014, which marked a return to its 2013 level. The largest deal in the Consumer Publishing segment in 2014 was Apax Partners’ acquisition of Trader Media Group for $1.93 billion.

“Publishers have achieved success in this rapidly changing market through leveraging their content and brand equity across various media platforms for deeper penetration,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “Many B2B media companies are also growing revenue by providing a host of marketing services to their existing client base.”  Zandy continued, “To support this strategy, media companies and the private equity investors backing them seek data, research, and consulting firm acquisitions to enhance their product offerings.”