Media Deals Up in '10, But Value Drops


An improving economy sharply lifted media acquisitions last year -- and pricing multiples as well.

There was a 27% rise in deals to 687 last year, according to Berkery Noyes, an investment bank specializing in the information content and technology industries.

The cash-flow multiple sell price -- a key business strength indicator -- climbed 51% to 10.4 in 2010 from 6.9 in 2009. The median revenue multiple rose 28%, to 1.8 from 1.4.

But it wasn't a big year in terms of total value of media deals. In 2010, that value dropped 35% to $24 billion.

Much of this was because of big planned deals in 2009 -- including the Comcast-NBC Universal acquisition, announced in December of that year. That agreement, in which Comcast will assume a majority stake in NBC with General Electric now a minority partner, is valued at $13.75 billion.



The top four deals in 2009 totaled $24 billion. Take these large transactions out of the mix and 2010 would have had a $10 billion increase -- a 84% gain over the previous year.

Major deals in 2010 included Warburg Pincus and Silver Lake Partners' acquisition of Interactive Data Corporation in March for $3.25 billion, and the RiskMetrics Group, Inc. purchase of MSCI Inc. in May for $1.4 billion.

The most active acquirer over the last three years has been business publication group United Business Media Limited -- which made 40 deals, 21 of which were announced in 2010.


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