• by Erik Sass  @eriksass1, April 2, 2008

Mergers and acquisitions proceeded at a healthy clip in the first quarter of 2008--even with the economy looking shaky, according to figures from the Jordan, Edmiston Group, Inc., an investment bank which helps broker deals and also tracks buyouts in the media world. Overall, there were 202 transactions with a total value of $13.4 billion in the first three months of 2008. That marks an increase in the average value of deals from the same period in 2007, with the total dollar value rising 5% and the number of transactions shrinking by 2%.

What's more, according to managing director Scott Peters, the M&A market is still thriving, despite the hand-wringing about tightening credit, gun-shy banks, and the troubled Clear Channel acquisition. Media companies and private equity both "continue to look for quality companies they can buy," although he conceded the market dynamic has changed.

"Over the past few years, it's been fueled by a very aggressive debt market, with private equity looking for deals that could support heavy amounts of debt, but that has changed dramatically," Peters said. Now, buyers are shifting focus to "high-quality assets, in good markets with good management, with less debt and very high growth trajectories."

In part, this means a shift in focus from traditional media to Internet companies--including lots of interest in integrated interactive marketing firms, according to Peters. Still, there is some activity on the traditional side.

M&A deals currently in the works fall into two general categories: strategic acquisitions and private-equity buyouts. Deals in the first category range in size from small to gigantic--"just look at Microsoft's bid for Yahoo"--while the private-equity buyers seem to be concentrating on mid-sized companies.

Peters believes private equity will continue to fuel a substantial number of M&A deals for the simple reason that "those funds still have to be put to work." And while less savvy investors might be running for cover, "that just opens up more opportunities for more seasoned, experienced investors, because there's less competition."