• by Gavin O'Malley , October 1, 2009

The state of M&A is: Not awful, according to new analysis from Jordan, Edmiston Group.

While the investment bank characterized the first two quarters of the year as "moribund," the M&A market across the media, information, marketing services and technology sectors showed signs of life in the third quarter with 168 announced transactions valued at $11.1 billion.

By comparison, the entire first half of the year saw only $5.3 billion in deal value, with a high concentration of small distressed sales.

This resurgence was driven by over a dozen transactions worth over $100 million and $1 billion, which drove the average deal size from $18 million in the first half of the year to $66 million in the third quarter, according to JEGI.

Year-over-year, however, transaction volume fell 30%, while deal value declined 42% through the third quarter of 2009. Overall, 466 M&A transactions worth $16.4 billion were announced. The two markets that actually saw growth in M&A activity in 2009 over 2008 were mobile and education.

Education information, technology and training deals increased by 15% in number and 41% in value to $3.2 billion, as this sector benefits from innovation, government spending and some shelter from the economic cycle.

The mobile media and technology sector, meanwhile, saw 25 transactions worth just under $400 million -- up 56% in number and 76% in value from 2008, as this long-expected market begins to accelerate.

Strategic buyers accounted for roughly 80% of total deal value through the third quarter, as they took advantage of better-priced opportunities and invested in innovative business models, new growth and integrated solutions.

Private equity firms, however, have played only a minor role in acquisitions so far this year, as many have been focused on improving profitability and restructuring debt in over-leveraged portfolios, JEGI concluded.

M&A activity for the business-to-business media sector declined significantly through the first three quarters of 2009, as no large deals were announced and deal activity primarily comprised distressed assets. Private equity firms, which were a key driver of M&A in this sector from 2005 to 2008, are focused on strengthening the financials of their portfolio companies, and few large transactions of b2b media assets are expected in the short term.

The consumer magazine sector, meanwhile, has been active with 31 announced deals in the first three quarters, as compared to 33 transactions over the same period of 2008.

The online media and technology sector saw the largest number of transactions announced and the highest transaction value through the first three quarters of all sectors covered by JEGI. However, the 141 deals valued at $5.6 billion lagged 2008 levels by 31% and 26%, respectively.

Still, many of the largest and fastest-growing online media companies were active acquirers in the third quarter -- including Facebook, which acquired FriendFeed for $50 million; IAC, which acquired People Media for $80 million; Amazon, which acquired Zappos for $928 million; MySpace, which acquired iLike.com for $19.5 million; Yahoo, which acquired Maktoob for $85 million; and Google, which acquired ReCaptcha.