• by Gavin O'Malley  @mp_gavin, January 3, 2011

Led by online media, marketing services, and mobile media, the M&A market for media, information, marketing services and technology rebounded in 2010, according to a new analysis from Jordan, Edmiston Group.

Both the number and value of M&A transactions during the year increased 39% over 2009 levels. In particular, online media, marketing services, and mobile media accounted for 73% of deal volume and more than half of overall deal value.

The average deal size for these key sectors was $38 million compared to $87 million for the balance of the sectors covered by JEGI, because, according to the investment bank, emerging companies have been trading earlier in their life cycles.

Overall, JEGI reported 845 transactions at a total value of $43.3 billion.

Corporate "strategic" buyers led the surge in M&A, as acquirers on 86% of transactions for the year, as "strategics" have unprecedented levels of cash on their balance sheets, with the S&P 1500 holding more than $1 trillion and growing in liquid assets.

Looking ahead, JEGI is predicting continued strong recovery in the M&A cycle, tempered by lingering concerns of the economy and tighter-than-normal credit availability to support M&A.

However, "markets climb a wall of worry," as the old Wall Street adage goes, to support a sustainable and vigorous deal environment, according to JEGI.

This past year saw a rising tide of smaller M&A transactions, with only six media and information deals valued over $1 billion. The largest was the acquisition of Interactive Data Corporation -- a provider of financial data and analytics -- by Silver Lake Partners and Warburg Pincus, for $3.2 billion.

The marketing and interactive services sector was the most active in 2010, with 254 transactions at a total value of $11.3 billion. Deal activity and value increased 66% and 77%, respectively, over 2009.

Mobile media and technology was the fastest-growing sector in 2010 with 77 announced transactions, a 114% increase over 2009 levels. Deal value was flat in 2010 vs. 2009 at $1.4 billion, with no $100+ million deals in 2010 and an average deal size of $19 million, significantly lower than the average deal size for all sectors of $51 million for the year.

The b2b online media and technology sector saw an 11% increase in the number of M&A transactions announced in 2010 over 2009 levels and a near doubling of transaction value, to $2.5 billion.

The b2c online media and technology sector was the second-most-active in 2010, with 230 transactions at a total value of $8.5 billion.

M&A activity for the business-to-business media sector increased 85% in 2010, but deal value fell precipitously for the year, with only one transaction of size: United Business Media's acquisition of Canon Communications, a data, information, and events provider for the medical design, design engineering, pharmaceutical and manufacturing segments, for $287 million.

According to JEGI, private equity firms have unprecedented amounts of uninvested capital -- over $400 billion and growing -- and the availability of debt is improving but still "patchy."

The two largest clouds over the M&A market are the ongoing hesitancy by the banks to lend, especially on smaller transactions -- those involving companies with less than $20 million EBITDA -- and lingering uncertainty about the economy and its growth projections over the next six to twelve months.