NEW YORK — April 4, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its Q1 2017 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity in the Media and Marketing Industry during Q1 2017 and compares it with the past four quarters.
According to Berkery Noyes’ latest research, transaction volume underwent a two percent uptick over the past three months. Aggregate value fell from $145 billion to $15.8 billion. Of note, two of the industry’s top three highest value acquisitions last year occurred in Q4 2016. This included AT&T’s announced acquisition of Time Warner for $105.3 billion, or $85.4 billion if net debt is excluded. If the Time Warner deal is omitted, value decreased 59 percent, which was about the same decline in value when examined on a year-over-year basis.
The industry’s largest transaction in Q1 2017 was IT research firm Gartner’s announced acquisition of CEB Global, a corporate research and advisory firm, for $3.3 billon. CEB Global provides research and analysis related to human resources, sales, finance, and law. In addition to CEB Global, Gartner announced its acquisition of L2, a subscription-based business intelligence service that benchmarks the digital competence of brands, during the quarter.
M&A activity in the Marketing segment decreased eight percent on a quarterly basis. However, deal flow in the digital marketing subsector gained five percent. Marketing transactions represented 31 percent of aggregate industry volume in Q1 2017, as opposed to 35 percent in Q4 2016 and 40 percent in Q1 2016. Notable Marketing segment deals year-to-date included Bain Capital’s announced acquisition of a majority stake in Daymon Worldwide, a provider of brand development, retail merchandising services, and consumer experience marketing, for $413 million; and Accenture Interactive’s announced acquisition of a majority stake in SinnerSchrader, a digital marketing and advertising agency based in Germany, for $62 million. Additional segment transactions completed by high profile acquirers during the quarter were Salesforce’s acquisition of Sequence, a user experience design agency; and Ebates’ acquisition of Cartera Commerce, a loyalty marketing solutions and performance-based rewards business.
Total volume in the B2B Publishing and Information segment increased 33 percent in Q1 2017. This made it the sector with the largest rise in volume over the past three months. Notable B2B related deals in Q1 2017 included Gartner’s aforementioned acquisition of CEB Global for $3.3 billion; Solera Holdings’ acquisition of Autodata Limited, which provides technical information to the automotive aftermarket, for $422 million; Vitruvian Partners’ acquisition of OAG Worldwide, a provider of flight status and scheduling information, for $215 million in a management buyout from AXIO Data Group; Zoopla Property Group’s acquisition of Hometrack, a provider of residential property market insights and analytics, for $152 million; and Dun & Bradstreet’s acquisition of Avention, a multi-channel platform that offers business information and sales enablement solutions, for $150 million.
Deal flow in the Entertainment segment stayed almost constant during the quarter, which followed a 27 percent decrease in Q4 2016. Notable Entertainment related transactions in Q1 2017 included United Luck Consortium’s $1 billion acquisition of Outfit 7, a media franchise with various mobile applications, which have received more than 5 billion downloads; Take-Two Interactive Software’s acquisition of Social Point, a mobile game developer, for $250 million; and Recon Group’s announced acquisition of a majority stake in Millennium Films, an independent film production company, for $100 million. Each of these deals were completed by China-based companies.
Also of note, the Outfit7 and Take-Two Interactive Software deals continued a trend of Chinese companies completing high value transactions in the gaming space during 2016. For instance, last year Chinese investment holding company Tencent Holdings announced its acquisition of Supercell, the Finnish maker of the “Clash of Clans” game, for $8.6 billion; and a Chinese consortium announced its acquisition of Playtika, a social and mobile games company headquartered in Israel, for $4.4 billion.
As for other select markets covered in the report, volume in the Internet Media segment increased 18 percent on a quarterly basis. Internet Media also nearly surpassed the Marketing segment as the industry’s most active sector in Q1 2017. The Exhibitions, Conferences and Seminars segment saw volume improve ten percent, which followed a 48 percent rise in Q4 2016. Deal activity in the Consumer Publishing segment fell 22 percent in Q1 2017 but remained about constant year-over-year.
“Companies that offer events, subscription-based data offerings and/or marketing services, are likely achieving growth and are attractive to both strategic and private equity acquirers,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “New acquirers such as TBG AG, a Zurich-based family office that just announced the acquisition of DTN, the U.S. real-time weather service to the agricultural sector, enter to create a dynamic M&A market. Large strategics’ divestitures of non-core properties and private equity timely exiting portfolio companies, coupled with private company sellers, have fueled this sellers’ market.”
A copy of the MEDIA AND MARKETING INDUSTRY M&A REPORT FOR FIRST QUARTER 2017 is available at the Berkery Noyes website.