2017-07-10 Berkery Noyes Releases Media and Marketing Industry M&A Report For Half Year 2017

NEW YORK — July 10, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2017 mergers and acquisitions trend report for the Media and Marketing Industry. The report analyzes M&A activity during the first half of 2017 and compares it with the four previous six-month periods from 2015 to 2016. 

Deal volume increased three percent on a half year basis. Total value fell 73 percent, from $176.03 billion to $47.22 billion. Of note, two of the industry’s top three largest transactions in 2016 occurred during the second half of the year and accounted for almost half of overall 2016 value. Aggregate value in first half 2017 declined 50 percent on a year-over-year basis but rose 19 percent relative to first half 2015.  

The median revenue multiple over the past six months decreased from 2.2x to 1.6x, while the median EBITDA multiple moved downward from 12.8x to 10.8x. Over the last two-and-a-half years, deals in the $10-$20 million range received a median enterprise value multiple of 1.7x revenue, compared to 2.1x revenue for those in the $20-$80 million range and 3.4x revenue for those in the $80-$160 million range and above.

The industry’s largest deal in first half 2017 was Sinclair Broadcast Group’s announced acquisition of Tribune Media Company for $6.55 billion. Tribune owns or operates 42 television stations in 33 markets, cable network WGN America, digital multicast network Antenna TV, minority stakes in the TV Food Network and CareerBuilder, and a variety of real estate assets.

Transaction activity in the Internet Media segment improved 13 percent in first half 2017. Notable Internet Media related transactions thus far in 2017 included Eurazeo and Goldman Sachs Merchant Banking division’s acquisition of Dominion Web Solutions, an online classifieds marketplace for the powersport, RV, commercial truck and equipment sectors, for $680 million; HomeAdvisor’s announced merger with Angie’s List, which provides reviews of local services that are based on first-hand experiences consumers have with doctors, contractors and other local professionals, for $574 million; InfoPro Digital’s announced acquisition of Incisive Media’s Insight division, which includes the Risk.net and Insurance Post brands, for $151 million; and Axel Springer’s announced acquisition of Logic-Immo, an online real estate portal, for $112 million.

Volume in the Marketing segment, which for the purposes of this report excludes pure software based companies, decreased 11 percent in first half 2017. Also of note, there was only one segment deal in the overall industry’s list of top ten highest value acquisitions during the half year period. Along these lines was Vivendi’s acquisition of Havas, an advertising and communication services company, for $2.43 billion.

Additional high profile Marketing transactions thus far in 2017 included Bain Capital’s announced acquisition of Daymon Worldwide, a provider of brand development, retail merchandising services, and consumer experience marketing, for $413 million; and Vector Capital’s acquisition of Experian’s Cross-Channel Marketing business for $300 million.

M&A activity in the Entertainment segment declined ten percent on a half year basis, which was about the same amount of volume as in second half 2016. Notable segment transactions in first half 2017 included Metro-Goldwyn-Mayer’s (MGM) announced acquisition of Epix, a premium entertainment network, from co-venture partners Viacom and Lionsgate for $1.03 billion; United Luck Consortium’s $1 billion acquisition of Outfit 7, a media franchise with various mobile applications, which have received more than 5 billion downloads; DoubleU Games’ acquisition of Double Down Interactive, a developer of online social casino games, for $825 million; and Content Partners’ acquisition of Revolution Studios, which offers film production services, for $400 million.

Regarding other sectors covered in the report, transaction activity in the Exhibitions, Conferences, and Seminars segment increased 16 percent. Deal flow in the Consumer Publishing segment declined five percent in first half 2017. This followed a 29 percent rise in second half 2016. As for the Broadcasting segment, M&A volume almost doubled over the past six months, from 22 to 41 acquisitions, making it the sector with the largest rise in activity.

Meanwhile, the number of acquisitions in the B2B Publishing and Information segment increased 21 percent in first half 2017. Notable B2B related deals year-to-date included Moody’s Analytics’ announced acquisition of Bureau van Dijk Electronic Publishing, a provider of business intelligence and company information, for $3.27 billon; Blackstone and Canada Pension Plan Investment Board’s (CPPIB) announced acquisition of Ascend Learning, which offers educational content and online tools for students, educational institutions and employers, with a particular focus on healthcare and other licensure-driven occupations, for $2 billion; Zurich-based family office TBG’s acquisition of DTN, which distributes real-time weather information to farmers and other customers, for $900 million; and Solera Holdings’ acquisition of Autodata Limited, a provider of technical information to the automotive aftermarket, for $422 million.

“Publishers have achieved success in this rapidly changing market through leveraging their content and brand equity across various media platforms for deeper penetration,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “Many B2B media companies are also growing revenue by providing a host of marketing services to their existing client base.”

A copy of the MEDIA AND MARKETING INDUSTRY M&A REPORT FOR HALF YEAR 2017 is available at the Berkery Noyes website.