Media/Marketing M&As Surge, Publicis Leads The Pack

Paris-based Publicis Groupe, the parent of Digitas, Starcom MediaVest Group and Zenith Optimedia Group, was the “most active acquirer by volume” between 2009 and 2011, according to a year-end media and marketing industry mergers and acquisitions report released late Wednesday by investment bank Berkery Noyes.

Publicis, which has been in an ultra-competitive horse race with WPP Group for digital marketing services bragging rights on Madison Avenue, made 39 transactions during the period, including 24 that were announced or closed in 2011.

Overall, the report found that total media and marketing industry transaction volume surged in 2011, growing 15% over 2010, from 1,225 deals in 2010 to 1,409 in 2011. Interestingly, the report finds that the “marketing” sector was the fastest-growing segment, with the volume of deals growing 29% from 332 transactions in 2010 to 428 in 2011.

Total transaction value grew 41%, from $38.31 billion in 2010 to $54.12 billion in 2011.

According to Berkery Noyes’ research, the median revenue multiple went from 1.5x to 1.9x in 2011. The median EBITDA multiple moved slightly from 10.4x to 10.6x, representing a 51 percent increase over 7.0x in 2009. Furthermore, the median revenue multiple for deals of $160 million and greater was 2.6x during this time period.

"The media and marketing industry is continuing its strong recovery from a slow fourth quarter in 2010," stated Managing Director Evan Klein, adding: “Marketing services and digital media companies have all benefited from a large increase in internet advertising revenues in 2011, and look to be promising segments for driving M&A activity."

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