Marketing Services, Technology Lead 2012 M&A
The Marketing Services & Technology sector accounted for nine of the 30 largest deals of the year, with 458 transactions valued at more than $20 billion -- up 67% for volume and 36% for value, respectively, compared with 2011, according to a recent report.
The Jordan, Edmiston Group (JEGI), an investment banking company, lists the top two largest deals of 2012 from Chinese B2B marketplace Alibaba, which reacquired Yahoo's interest in the company for $7.1 billion, and Dentsu's $4.9 billion deal of the Aegis Group.
In Q4, the largest three deals were Nielsen's $1.2 billion acquisition of Arbitron, Oracle's $871 million buyout of Eloqua, and Epsilon's $460 million acquisition of Lake Capital's Hyper Marketing.
M&A rose to 1,351 transactions in 2012, up 50% more than the prior year, valued at nearly $75 billion, according JEGI. Driven primarily by smaller deals, as approximately 90% of transactions were less than $50 million in value, about 14 deals topped $1 billion for the year, including six in Q4.
Kevin Lee, CEO and founder of the marketing tech company Didit, thinks agencies will continue to acquire and merge in 2013, as a strategic way to grow their holding company. Technology companies, including those focusing on search engine marketing, will consolidate, as well.
"Some of the boxes in Terry Kawaja's LUMAscape are getting a bit crowded without showing differentiation," he said. "A smart way to grow a company's valuation is through M&A."
The mobile media and technology sector saw 124 deals worth in aggregate $3.5 billion, representing increases of 72% and 77%, respectively, compared with 2011. Many were driven by games and applications. The largest deal in this space during Q4 was Gree's acquisition of social mobile games developer Pokelabo for $174 million. Viggle also acquired GetGlue, a social TV application, for $79 million. Others in the sector were Google, Bertelsmann, Twitter, Yahoo, Zynga, MediaMath, and Urban Airship, among others.
The JEGI report points to Adobe's acquisition of Behance, a social online platform where artists showcase and discover creative work; and eFront's $50 million acquisition of Investment Cafe, which offers a suite of Web-based financial reporting and fund-raising products as being some of the most notable deals in Q4.
The value of deals for the B2B online media and technology sector doubled to nearly $12 billion in 2012, on 84 announced deals. Aside from the Alibaba's Yahoo deal, the Carlyle Group purchased Getty Images, a creator and distributor of visual and digital content, from Hellman & Friedman for $3.3 billion.
The report identifies B2C Online Media & Technology accounted for five of the top 30 transactions for the year, including two deals that took place in the fourth quarter, such as Priceline's acquisition of Kayak for $1.6 billion and Permira Advisers' acquisition of Ancestry.com for $1.5 billion. Two Top 30 deals for B2B Online Media & Technology included Alibaba's buyback of Yahoo's stake in the business for more than $7 billion.