M&A Activity Hits $67.5 Billion In 2013
Media, information, marketing and related technology sectors merged and acquired to the tune of $67.5 billion -- about 1,057 deals -- during the first three quarters in 2013, according to The Jordan Edmiston Group (JEGI).
Companies followed through with 11 deals valued at more than $1 billion each worldwide in the first three quarters, compared with eight during the same time last year. Most filled holes in services and product lines or provided an entrance into new markets. Five of those deals occurred in Q3 2013. Overall, the average deal size fell in comparison with 2012.
Although slightly down in number of deals, the marketing and technology sector remained the most active in the number of deals and the deal value, with 348 transactions announced at a total value of $34.2 billion.
Aside from the $21.9 billion Publicis/Omnicom merger that drove up total deal values, Salesforce.com acquired ExactTarget for $2.25 billion; Baidu acquired 91 Wireless Websoft
in China for $1.8 billion; Google acquired Waze for $1.3 billion; and Yahoo acquired Tumblr for $1.1 billion, reports JEGI.
The independent investment banking firm reports that smaller deals made up 93% of transactions under $100 million in value -- deals like the Adobe acquisition of Neolane for $600 million, the AOL acquisition of Adap.tv for $405 million, and the Platinum Equity acquisition of CBS Outdoor Limited for $225 million.
Expect mobile media and technology deals to increase. Through Q3 of 2013, this sector rose 5% in the number of transactions to 110 deals and 84% in deal value to $5.5 billion, fueled by Baidu and Google. Other notable deals in mobile include Twitter's acquisition of MoPub, Millennial Media's acquisition of JumpTap, and Hasbro's 70% stake, $112 million, in Backflip Studios, a developer of iPhone games.
"We expect the M&A market to continue to be dominated by small strategic transactions, due to the uncertain environment in the U.S. caused by political gridlock, a sluggish economy and the implementation of Obamacare and numerous other government regulations," JEGI reports.
Larger transactions will likely focus on aggregation and consolidation among mature or legacy companies as a result of low-growth economy and rapid technological changes, with most management teams and boards of directors somewhat reluctant to pursue significant transformative deals.