2012 M&A Market Shows Dramatic Increase in Number and Value of Deals

January 7, 2013

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New York, NY December 28, 2012 – Burgeoning innovation, rising corporate investment and a year-end rush to beat the tax man drove robust mergers and acquisitions in 2012 for the media, information, marketing and technology sectors.  M&A surged to 1,351 transactions for the year, or 50% more than in 2011, at a total value of nearly $75 billion, according to The Jordan, Edmiston Group, Inc. (JEGI) (www.jegi.com), the leading independent investment bank specializing in M&A advisory services across these markets.

This record-setting volume was driven primarily by smaller deals, as approximately 90% of M&A transactions were less than $50 million in value.  However, 14 deals topped $1 billion for the year, including six in Q4.

Over 400 of these transactions closed in the fourth quarter, many in December, as sellers sought to beat the calendar on anticipated tax changes in 2013. Indeed, of seventeen transactions closed this year by JEGI, five closed the week before Christmas.

Investment in the interactive markets, including B2B and B2C Online Media & Technology, Mobile Media & Technology, and Marketing Services & Technology, continued to drive the bulk of M&A activity, accounting for 70% of all transactions for the year and 62% of value.  Marketing automation companies were in great demand, with acquisitions by Salesforce, Adobe, Oracle and ExactTarget.

Continued growth in digital ad spending helped propel this avalanche of interactive M&A.  Internet and mobile advertising revenue in the U.S. reached $9.26 billion in Q3, the largest quarter on record, according to the Interactive Advertising Bureau (IAB).  These figures showed an 18% climb over Q3 2011 and a 6% increase over Q2 2012.

Randall Rothenberg, President and CEO, IAB, said, “These historic investments in interactive point to the strong results that marketers are receiving from digital marketing.  It is a highly effective medium for interacting and engaging consumers, who are no longer passive, but are active participants in contemporary media online, through social media, and on-the-go with mobile.”

While interactive continues to grow rapidly, the broader media and information industry saw increases in M&A across more “traditional” sectors, such as B2B Media (up 143% in number of deals and nearly 8x in deal value), Database & Information Services (up 40% and 87%), and Exhibitions & Conference (up 56% and 94%).

Healthcare Information & Technology, another hot area of investment, saw M&A deal activity increase 86% in 2012, with more than $10 billion of deal value for the year.  Chris Calton recently joined JEGI as a Managing Director to oversee the firm’s healthcare information and technology practice.

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