What Recent M&A Trends Mean to the Industry
A 2010 M&A trends report from investment banking firm Berkery Noyes finds media industry transaction volume on the rise (up 27 percent) even as total transaction values fell 35 percent in 2010 compared to the year before, from $37 billion to $24 billion.
The report, which tracks mergers and acquisitions across all media, states the largest transaction last year was Warburg Pincus and Silver Lake Partners' acquisition of Interactive Data Corp. in March for $3.25 billion.
With 239 transactions, Internet Media was the segment with the most transaction volume, while the Entertainment Content segment saw the largest percentage increase in volume, largely because of transactions involving mobile and social gaming. The Professional Publishing and Information segment also saw a volume increase, but Consumer Publishing, Broadcasting, and Exhibitions/Conferences all saw M&A volume declines compared to 2009.
Publishing Executive Inbox asked Kathleen Thomas, a managing director at Berkery Noyes who specializes in the media industries, for her take on what the trends mean.
INBOX: According to your report, the number of transactions rose in 2010, while total transaction value fell. What does this tell us about the health of the industry?
KATHLEEN THOMAS: Smaller deals were easier to get financed and more easily digestible by strategic buyers as most companies had their first year of stabilization or business improvement after a punishing recession.
INBOX: What do the types of transactions occurring tell us about trends in the market? How is broadcast media different from what legacy print publishers are trying to do?
THOMAS: There is a strong focus on targeting online advertising spend. Other hot areas are healthcare technology and education.
INBOX: Where do you see things heading in 2011? Will there be more divestiture such as what we saw with Reed Business Information, or consolidation? Will larger companies continue to focus on acquiring promising technologies and platforms, as News Corp. has been doing—and what would be the significance?