A Promising Outlook For Media & Technology M&A

Across the media, information, marketing, health care and technology sectors, nearly 50% more companies in the $10-$50 million revenue range are planning an acquisition this year, according to new estimates from Jordan, Edmiston Group.

Many of these companies are looking for new process technologies, content engines and tools for manipulating and packaging data, the investment bank reports.

JEGI also expects 2013 to see a diverse and active pool of buyers among strategic companies and private equity firms, both of which still have significant amounts of capital that they need to put to work.

“These key trends … suggest that M&A will continue to be robust ... through 2013,” according to Adam Gross, chief marketing officer at JEGI.

That said, the market for mergers and acquisitions was modest at best during the first quarter of the year.

The number of deals for the business-to-business online media and technology sector rose 11% in the first quarter of 2013, bringing the total number of deals announced up to 21. Deal value was almost flat, however, at $198 million for the quarter.

So far, notable 2013 deals have included CoreLogic’s acquisition of CDS Business Mapping, a provider of Internet mapping and application development, for $78 million; along with Back Stage’s acquisition of Sonicbids, a Web site that helps bands connect with people who book or license music worldwide, for $15 million.

In the business-to-consumer online media sector, Amazon recently agreed to buy Goodreads, a Web site that allows members to search and browse books, share recommendations, for a reported $150 million.

Business-to-consumer media and technology was the third most active sector for M&A in the first quarter of the year, with 53 transactions at a total value of $1.2 billion.

The number of deals and value for the mobile media and technology sector rose 32% and 17%, respectively, in the first quarter of 2013, as compared to the first quarter of 2012.

However, the number of deals and value declined 24% and 21%, respectively, compared to the first quarter of 2012.

Although the first quarter saw a lot of activity, the smaller deals did not offset the large transactions in the first quarter of 2012.

 

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