M&A Boomtown: How Long Will It Last?
Last year marked a blockbuster year for mergers and acquisitions throughout the publishing industry. The business-to-business magazine publishing market saw 42 deals close for a total of more than $6 billion, representing a 140-percent increase in total value over 2005 figures, according to media and information industry investment-banking advisor The Jordan, Edmiston Group Inc. (JEGI). JEGI cited huge numbers in the consumer magazine space as well, as 45 deals closed in 2006—11 more than the prior year—with the deals’ value coming in just under $2 billion.
Publishing Executive spoke with Scott Peters, managing director for JEGI, about what ’07 may hold, as well as some M&A basics for those considering putting their businesses on the market.
How do you see 2007 following up a blockbuster year like 2006 in terms of activity?
Scott Peters: The bottom line here is M&A [was] extremely active in every category in 2006. [There was] an increasing interest in valuation premiums in the online media side of the world. So that continues to be a big growth-driver in terms of number of transactions.
For 2007, our view is that the first half of the year is going to be very strong. After that it’s really tough to have any visibility, but we think that 2007 is going to be a very good year for M&A in general. We don’t see a slowdown or a real change, although we don’t see a radical acceleration either.
We’ve been at a sort of peak M&A market for a couple of years, and I think we’re still bouncing around the top of that peak. At some point that will turn—it always does. But sitting here today, I don’t see visibility as to when that is going to happen. It may start happening toward the latter half of ’07, or it may not. It’s too early to tell.