NEW YORK — October 6, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2016 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.
Deal volume declined seven percent between second and third quarter 2016. Aggregate value fell 47 percent, from $56.6 billion to $30.1 billion. This was attributable in major part to Microsoft’s announced acquisition of LinkedIn for $25.9 billion in the second quarter. If the LinkedIn deal is excluded, total value decreased only two percent.
M&A activity in the Marketing segment experienced a three percent drop-off during the third quarter. However, volume in the segment year-to-date increased two percent compared to the first three quarters of 2015. In terms of value, none of the overall industry’s top ten largest deals year-to-date were Marketing related. The highest value Marketing deal in the third quarter and thus far in 2016 was Dentsu’s announced acquisition of a majority stake in Merkle, a data marketing firm that specializes in customer relationship management, for $1.5 billion.
The number of transactions in the Internet Media segment, after rising 19 percent from first to second quarter 2016, declined 28 percent in the third quarter. Notable Internet Media deals over the past three months included AOL’s announced acquisition of Yahoo’s core operating business for $4.8 billion, which doesn’t include Yahoo’s shares in Alibaba Group Holdings or Yahoo Japan; staffing company Randstad Holdings’ announced acquisition of Monster Worldwide, an online jobs site, for $429 million; and Univision’s announced acquisition of Gawker Media’s digital media assets in a bankruptcy auction for $135 million through Fusion Media Group. In addition to Monster, another notable acquisition in the online job search space during the quarter was Glassdoor’s acquisition of Love Mondays, an employer review and jobs site based in Brazil.
The Exhibitions, Conferences, and Events segment saw volume decrease 29 percent on a quarterly basis, from 34 to 24 deals, returning to its first quarter level. Strategic acquirers were responsible for 79 percent of the segment’s volume year-to-date, as opposed to 67 percent of volume throughout the first three quarters of 2015.
One notable related transaction in third quarter 2016 was Informa’s announced acquisition of Penton Information Services for $1.6 billion, which will allow U.K. based Informa to grow its global exhibitions business in the U.S. Informa operates in several areas including academic publishing, knowledge, and events businesses. The company has shifted its focus over the years from mainly a B2B print magazine into an events and information business. Furthermore, this marked an exit for MidOcean Partners and Wasserstein & Co., which had owned Penton since 2006.
The B2B Publishing and Information segment stayed about the same on a quarter-to-quarter basis with 40 deals. The segment’s largest deal in third quarter 2016 was the announced sale of Thomson Reuters’ Intellectual Property & Science Business to private equity funds Onex and Baring Asia for $3.6 billion.
M&A volume in the Consumer Publishing segment improved 22 percent, from 36 to 44 deals. Notable acquirers over the last three months included Vice Media with the acquisition of GARAGE Magazine, a biannual publication focused on art, fashion, and culture; Hearst with the acquisition of Houston Community Newspapers & Media Group, which reaches more than 34 local communities surrounding the metropolitan area; and Patrick Dolan and Altice USA with the announced acquisition of Newsday Media Group, which primarily serves Long Island.
As for additional areas covered in the report, volume in the Entertainment Content segment increased 31 percent during the quarter, from 48 to 63 deals. High profile third quarter acquirers in the gaming sector included Microsoft Corporation with the acquisition of Beam Interactive, an interactive game streaming service that lets viewers play along with streamers as they watch; Sega’s acquisition of Amplitude Studios, which develops and publishes PC games; and Twitch Interactive with the announced acquisition of Curse, a company focused on content and products specifically for gamers. Meanwhile, the largest gaming deal in the third quarter was a Chinese consortium’s announced acquisition of Playtika, a social and mobile games company based in Israel, for $4.4 billion.
“The amount of debt and equity available is helping to foster a favorable transaction environment,” said Vineet Asthana, Managing Director at Berkery Noyes. “In particular, strategics are aggressively pursuing acquisitions to supplement their organic growth. As the shift to digital continues, there remains a need to deliver content through multiple channels while finding new ways to monetize end users. Many potential acquirers remain on the lookout for new products and services that will give them a competitive edge.”
A copy of the MEDIA AND MARKETING INDUSTRY M&A REPORT FOR THIRD QUARTER 2016 is available at the Berkery Noyes website.