Media Transactions Hit $35B, Interactive, Tech Major Investment Arenas

Last year marked a comeback for media, information, marketing services and technology M&A activity. The sectors seem to have sustained a similar place during the first three quarters of 2011, according to Jordan, Edmiston Group.

Some 700 announced transactions reached $35.3 billion in transaction value through the third quarter of the year -- a 10% increase over the same period in 2010, the investment bank reports.

Strategic buyers, according to JEGI, continue to set the tone of the market as corporations invest in growth and new revenue streams to offset competitive pressure, as well as rapid shifts in their more traditional markets.

Meanwhile, private equity firms have started to become more active in these sectors, transacting on a number of deals worth north of $100 million.

In particular, interactive, marketing services and technology markets continue to account for the majority of deal activity and value, with the B2B and B2C online media & technology, marketing & interactive services and mobile media & technology sectors accounting for 73% of total deals and 63% of deal value in the first three quarters of 2011.

In the third quarter, major media and technology companies actively acquired, putting hundreds of millions to work in the marketplace, JEGI reports.

Notable deals during the period included Web.com's acquisition of Network Solutions, a provider of Web site services, online marketing and domain name registration, from General Atlantic and Sonostar Capital Partners for $755 million, including assumed liabilities; and Reed Elsevier's acquisition of Accuity Holdings, an online subscription-based data provider for financial services companies, from Investcorp for $532 million.

Also making headlines was ValueClick's acquisition of Dotomi, a provider of online retargeting advertising for retailers, for $295 million; and Ebay's acquisition of Zong, which offers solutions that enable users to buy virtual goods inside social networks and online games using their cell phones, for $240 million.

Most recently, Glam Media bought Ning, a social-media platform, for $150 million in stock.

Also of note, private equity firms are becoming more active and investing in larger deals across the media, information, marketing services and technology sectors, JEGI reports.

As an example of this trend, JEGI cites Kohlberg Kravis Roberts, Silver Lake and Technology Crossover Ventures $2.25 billion investment in Go Daddy, an Internet domain registrar and Web hosting company.

Looking forward, the media and technology markets continue to evolve at a "torrid pace," and companies are increasingly seeking interactive, marketing services, mobile and technology assets to drive growth and provide new revenue streams, JEGI suggests.

As such, innovative, high growth business models that complement companies' existing revenue drivers will be highly sought after, at premium valuations.

Private equity firms have $376 billion of cash -- according to the latest report from Cambridge Associates -- sitting on the sidelines and ready to be put to work.

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