February 3, 2014 MEDIA & MARKETING DEAL VOLUME STAYS CONSTANT AS VALUE SOARS

Berkery Noyes has issued its Media & Marketing report for full year 2013. The firm’s research showed that deal volume remained nearly constant on a year-to-year basis. However, this represented a six percent rise compared to 2011. Strategic acquirers accounted for 91 percent of the industry’s deal volume in 2013, an increase of five percent relative to 2012.

Total deal value showed a gain of 28 percent, from $75.81 billion in 2012 to $97.30 billion in 2013. Of note, the announced merger of Publicis and Omnicom was responsible for 21 percent of the industry’s aggregate transaction value in 2013. In terms of valuations, the median revenue multiple increased from 1.4x to 2.0x, while the median EBITDA multiple rose from 8.0x to 9.7x. In both instances, this marked a return to valuations that were seen in 2011.

The segment with the largest year-to-year rise in volume was Consumer Publishing, which increased 16 percent, from 167 to 193 transactions. Harland Clarke’s announced acquisition of Valassis Communications for $1.78 billion in the shopping guides and coupon subset was the segment’s highest value transaction in 2013. As for other markets covered in the report, deal activity in the Entertainment segment increased six percent between 2012 and 2013. 

Although the Broadcasting segment saw a decline in volume, its corresponding aggregate value more than tripled. There were 13 Broadcasting transactions above $100 million in 2013, accounting for $11.48 billion in total value.

“Strong merger and acquisition activity should persist as publishers, advertising agencies and others continue to adapt to change by expanding their digital offerings,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “As the lines between content, marketing and advertising continue to blur, their product depth and breadth will encompass more. All of this has the potential to help fuel M&A activity in the foreseeable future.”