JEGI: M&A Activity 'Accelerating' in 2011
The Jordan Edmiston Group Inc. released their 2010 year-end overview of mergers and acquisitions on Monday, reporting a strong rebound in the media, information, marketing and technology sectors and predicting a robust M&A market in 2011.
The year just completed saw 845 transactions at a total value of $43.3 billion, the report said, up 39 percent over 2009 levels. The surge was led by online media, marketing services and mobile media, which together accounted for 73 percent of deals.
Important trends in 2010 include activity from corporate "strategic" buyers, indicating liquidity stemming from ready cash at hand despite a still-tight credit market, and a rise in smaller M&A transactions. Of the six deals valued at over $1 billion, the largest was Silver Lake Partners and Warburg Pincus' acquisition of Interactive Data Corporation for $3.2 billion. Among publishing acquisitions the largest was the acquisition of Canadian newspaper group CanWest by a group of creditors for $1.1 billion.
Also notable was New Corp.'s $360 million purchase of Wireless Generation, which serves the education industry with mobile data systems and assessment.
Increasing liquidity among corporations and private equity firms, along with encouraging reports on U.S. Internet ad revenue (up 17 percent from the year before in 3Q 2010, according to the Interactive Advertising Bureau) and online ad spending, signals a robust M&A market in 2011, the report states. Offsetting the positive indicators are the continued tight credit market and lingering uncertainty about the economic recovery.
A great deal of activity was seen in the database & information services, online media & technology and marketing & interactive services sectors in 2010. Mobile media & technology was the fastest growing sector, with deals increasing 114 percent over 2009 levels (deal value was flat, however, at $1.4 billion).
Things were quieter in the business-to-business media and consumer magazine sectors. The business-to-business media sector saw an 85 percent increase in deals but a fall in deal value, with the only transaction of major size being United Business Media's acquisition of Canon Communications. Notable deals also included Lebhar Friedman's sale of Nation's Restaurant News and Dowden Health Media, to Penton Media and High Road Capital Partners, respectively. Consumer magazines saw 26 deals at a total value of $214 million, with no transactions valued at or above $100 million.