M&A Transaction Value Down 91% in Q1

April 2, 2009

This article is included in these additional categories:

Agency Business | B2B | Financial Services | Television | Trade Shows & Events

As major media companies re-tool for future growth and prepare to meet increasing digital challenges, the M&A market in the first quarter of 2009 came close to hibernation in the face of the economic downturn and tight credit markets, according to (pdf) the latest M&A report from the Jordan, Edmiston Group, Inc. (JEGI).

In the first quarter of this year, 129 transactions for a total of $1.3 in deal value were announced across the media, information, marketing services and technology sectors. The represented a decline in the number of transactions and transaction value of 36% and 91%, respectively vs. Q108.


The number of deals completed in Q109 also? marked a 7% decline against Q408. The Q109 deal value is the lowest on record since JEGI began compiling M&A volume more than a decade ago.

Taking Time to Re-Tool

Despite this major slowdown in activity, JEGI reports that major media, information, marketing and technology companies continue to re?tool their businesses for digital and are actively looking for strong acquisition opportunities of high?growth, emerging businesses.

Top 20 Most Active Strategic Acquirers
Over the past five years, top strategic acquirers, such as United Business Media (UBM), Thomson Reuters, Daily Mail & General Trust, Reed Elsevier, and WPP, have viewed – and continue to view – M&A as an important part of their corporate strategies and an essential driver of growth.

The top acquirers:


M&A Deal Activity and Transaction Value
During Q109, 62% of the announced deals and 68% of total transaction value arose from two main industry sectors – Marketing & Interactive Services and Online Media & Technology, where smaller digital, interactive marketing, and technology growth companies are attractive acquisition targets
Specific M&A highlights by sector:

  • The business?to?business media sector saw very little activity during Q109, with three deals completed and no significant transactions. The majority of transactions in this sector were single magazine sales, such as the divestitures of Canadian Industrial Machinery and Sources & Design Magazine. In the first quarter of 2008, there were several larger B2B integrated media deals, including the sale of Randall?Reilly to Investcorp.
  • The consumer books sector saw three deals completed in Q109, valued at $15 million. While Crown Publishing Group, a division of Bertelsmann, acquired Philip Wood, a publisher of non?fiction books, this sector has not seen a significant transaction since Bertelsmann acquired Time’s 50% stake in Bookspan for an estimated $150 million in April 2007.
  • Activity in the consumer magazine sector gained in Q1 2009, as the number of transactions and overall value jumped 89% and 53%, respectively, over 2008 levels. With the downturn in the economy and consumer magazine ad revenue, several strong consumer magazine brands were acquired opportunistically by both strategic and private equity buyers (e.g., Sandow Media’s acquisition of Western Interiors and Design and Indigo Acquisition’s purchase of Garden & Gun).
  • The database and information services sector saw eight transactions completed Q109. Deal value for this sector sharply declined from the first quarter of 2008 in the absence of multi?billion dollar transactions, such as Hellman and Friedman’s purchase of Getty Images for $2.4 billion and Reed Elsevier’s $4.1 billion purchase of Choicepoint.
  • The educational and professional publishing sector saw a 20% decline in deal activity in Q109, compared with Q108. Still, several multi?million dollar transactions were completed, including EBSCO’s acquisition of Salem Press and the acquisition of William Andrew Publishing by Elsevier (Reed Elsevier Group).
  • The exhibitions and conferences sector recorded eight deals in Q109, valued at $38 million. There were no $100+ million transactions in the quarter to compare with VSS’s acquisition of Clarion Events for $234 million in Q1 2008, although Access Intelligence, a VSS portfolio company, acquired the Offshore Communication and Energy Ocean events.
  • Marketing and interactive services was very active in the first quarter, with 37 deals valued at $467 million. However, there were few significant transactions in Q109 to compare with the more notable transactions of Q108, such as the recap of Undertone Networks by JMI Equity and the sale of e?Dialog to GSI Commerce. Noteworthy transactions in Q109 include JEGI’s sale of mSnap to SmartReply, and Haggin Marketing’s acquisition of SolutionSet.
  • Over the past few years, the newspaper sector has suffered from declining circulation and advertising revenue. While many newspaper groups are willing sellers, few buyers stepped forward in Q109, with only five deals announced. As with consumer magazines, there were opportunistic acquisitions in this sector in Q1, such as Platinum Equity’s acquisition of the San Diego Tribune from Copley Press
  • Online media & technology was the most active sector for M&A in Q109, with 43 transactions, accounting for 33% of total deals announced. Major media companies, such as The Walt Disney Company, were active in acquiring consumer online media companies to expand their digital offerings. Others spun off non?core assets, such as IAC’s sale of Match.com to Meetic for $100+ million, and its divestitures of ReserveAmerica and 236.com. However, many transactions were last?resort exits for companies that could not continue independently, JEGI said. This helped account for an 87% drop in deal value, as compared with Q108.

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