2012: M&A Deals Hit $76 Bil, Marketing Segment Leads Efforts

While dollar volume in deal-making in media mergers and acquisitions rose in 2012, the average prices for those deals declined.

New York-based investment banker, Berkery Noyes, says total dollar volume climbed 17% to $76 billion last year. But the price for those deals -- in terms of revenue multiples and the cash flow multiple -- went lower.

Median revenue multiple sank to 1.3 times the price of those deals from 1.8 times. Earnings before interest, taxes, depreciation and amortization dropped to 7.5 times from 9.8 times the price.

The overall number of transactions saw just a slight improvement -- 3% to 1,611 deals. But deals are up 22% from deals made in 2010. The biggest category again was in the marketing segment, at 504 deals -- about the same versus a year ago. Internet media was next at just over 400 deals.

Digital marketing/agency deals were the major reason the marketing segment tallied some upswings. Last year, that was highlighted by WPP Group's big transaction of AKQA, a San Francisco-based digital agency, for $540 million. WPP was also the most active buyer in the field.

Internet media was down 10% in volume of deals to just over 400 -- but the overall dollar value of the segment climbed 81%. One of the largest was Permira’s acquisition of Ancestry.com, a portfolio company of Spectrum Equity, for $1.4 billion in the fourth quarter.

The biggest area of growth for media was in the exhibitions, conferences, and seminars segment, which grew 82% over 2011. The entertainment segment climbed 18% -- with film studio deals a big part of this, up 42% over a year ago. The biggest of these: Walt Disney Company’s acquisition of Lucasfilm for $4 billion.

The consumer publishing segment climbed 20% -- but overall value dropped 38% versus a year ago, mostly due to smaller mid-size company acqusitions.



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