Marketing services-related M&A deals last year totaled $27.7 billion, down 15% from 2018, according to an analysis by consulting firm R3. The firm assessed 489 deals struck between January and December 2019.
Publicis Groupe led the pack with its $4.2 billion deal for data giant Epsilon. Bain Capital ranked second with its $3.1 billion deal for a 60% stake in Kantar. (WPP retained the remaining 40% of the research unit.)
Accenture was third-ranked, investing nearly $1.5 billion last year, including an estimated $475 million for ad agency Droga5.
Blackstone was fourth with $750 million in marketing services-related deals — it also bought a majority stake in Bumble parent MagicLab. Dentsu was fifth with transactions valued at nearly $400 million.
According to R3, Dentsu was also the most acquisitive in the space with 12 deals, including D2C agency MuteSix and Colombian agency Chef.
“Buyers have been looking at investments that will strengthen their position in an uncertain geopolitical climate,” stated Greg Paull, principal at R3. “Though martech and adtech have driven M&A value, there has been more interest in acquisitions that will increase regional presence and serviceability.”
By region, North America led with $19.9 billion worth of transactions; R3 noted trade tensions and increased regulatory scrutiny continued to suppress the appetite for deals by Asian companies.
Holding companies pulled back on quantity, cutting the number of M&A deals by more than half, though year-on-year spend remained constant, thanks to large Epsilon-like deals.
“Restructuring has shifted attention away from volume and forced holding companies to attend to integration,” said Paull. “It’s been about what’s going to help win new business.”