M&A Market Heats Up in First Half of 2010
The largest deals announced by this group in the second quarter included IBM's acquisition of Coremetrics, the web analytics and digital marketing optimization company, for an estimated $150 million; Salesforce.com's acquisition of Jigsaw Data Corp., an online business contact database, for $142 million; Alliance Data System's acquisition of Equifax's Direct Marketing Services division for $117 million; and Yahoo's acquisition of online content publisher Associated Content for a reported $90 million. However, average deal sizes for the interactive markets remained relatively small, averaging $23 million vs. an average deal size of $47 million for the overall media marketplace.
With interactive marketing spending in the US estimated to reach nearly $30 billion in 2010, according to Forrester Research, media companies are seeking to incorporate more interactive marketing services into their product offerings, to more deeply service brands and advertisers. CBS, News Corp., Nielsen, Time Warner, and United Business Media all made acquisitions in the interactive, marketing services and technology markets in the second quarter of 2010. Hearst's acquisition of iCrossing reflects broader efforts by diversified media companies to augment display advertising sales with a complementary presence in interactive marketing services, and JEGI anticipates similar transactions going forward, as other media groups tap into higher growth services.
Strategic Buyers Continue to Lead M&A Charge, but PE Picking Up Steam
Of the 211 transactions announced in the second quarter of 2010, 45 were led by private equity firms or PE‐backed companies, a modest pace compared to earlier periods, but a sharp increase from 2009. Private equity firms, with approximately $425 billion of uncommitted capital, according to Cambridge Associates, are becoming more active once again; they accounted for the two largest transactions of the quarter - the acquisitions of TransUnion and Interactive Data Corporation. In interactive, marketing services and technology, numerous PE firms were active buyers, including Austin Ventures, AXA Private Equity, Blackstone Group, Great Hill Partners, H.I.G. Ventures, Providence Equity Partners, Riverside Company, Veronis Suhler Stevenson, Wicks, and ZelnickMedia. The largest PE deal in these markets during the quarter was AXA Private Equity's acquisition of online travel agent Go Voyages from Groupe Arnault for $493 million.