Business News

M&A Activity in Media, Marketing Services, and Internet Expected to Increase in 2011 Says Investment Bank

Thursday 16. December 2010 - Annual M&A survey by AdMedia Partners finds industry executives optimistic about economy and bullish about M&A activity in online, analytics, mobile and social sectors

AdMedia Partners, a leading investment bank serving companies in digital and traditional media, marketing services, and related technologies, today announced the findings of its 17th annual survey on industry M&A prospects for 2011, asked of top U.S. and international industry executives and investors. Conducted in November, the survey provides unique insights valuable to sellers, buyers and private equity investors, including expectations of:
M&A Valuation Multiples: segmented across key categories of both marketing services (including interactive agencies, analytics firms, social and mobile marketing and marketing technology) and media (including consumer media, online media, custom content, and B2B).
M&A Activity: differentiated by strategic and financial buyers in the marketing services and media sectors.
Spending Growth: in advertising and online advertising markets.
Trends in Content Distribution and Monetization Models: including how media firms deliver content across print, web, mobile and tablet, and how the revenue models are shifting.
Key themes that emerge from this year’s survey include:
Higher Valuation Expectations: On the services side, approximately half of respondents considered EBITDA multiples of 8x or greater to be reasonable for companies providing analytics/optimization, mobile marketing, social marketing and marketing technology services. The median multiples for media firms were in the 5-6x EBITDA range, with the exception of online media, which achieved valuation expectations of 7.5x. Please see the survey for more in-depth information on expected multiples across sectors.
Expected Increase in M&A Activity: Respondents believe that M&A activity will increase in 2011 – with 78% of media and 86% of services respondents expecting more M&A activity from strategic buyers and 63% of media and 68% of services respondents expecting more M&A activity from financial buyers.
Mobile and Social Media Marketing: As the use of social networks and connected devices continues to proliferate, marketers are scrambling to add capabilities to communicate with consumers. The survey shows that these sectors are priorities to acquire or develop.
Convergence: Many respondents commented that the lines between marketing services, media and content and technology companies will continue to blur, with almost half of marketing services firms seeing new competition from content companies; likewise, 40% of media companies expressed a desire to develop or acquire marketing services capabilities.
Demand for Analytics/Optimization: Given the continuing focus on quantifiable results and the inherent nature of digital media to facilitate such measurement, the majority of respondents (59%) in the services category noted that they are considering developing or acquiring analytics/optimization capabilities.
Detailed information on these themes and other M&A related topics are included in the full 2011 survey on M&A activity.