JEGI releases its Media and Information M&A report for Q1 2011

Investment bank Jordan Edmiston Group, Inc. (JEGI) of New York has released its Media and Information M&A report for Q1 2011

Deal Value Rises; Number of M&A Transactions Relatively Flat

The overview is below. It can be read as a PDF on the JEGI website.

New York, NY March 31, 2011 – M&A transaction value for the media, information, marketing services and technology sectors reached $12 billion in Q1 2011, representing a 16% increase over Q1 2010. The first quarter of 2010 had seen an 83% surge in deal volume and a nearly seven time increase in transaction value over Q1 2009 levels. So, 16% growth in Q1 2011, off a large prior year base, reflects a healthy continuing M&A environment, according to The Jordan, Edmiston Group, Inc. (JEGI) (, the leading independent investment banking firm specializing in M&A advisory services across these core markets.

The interactive and technology markets accounted for an even greater share of activity, with the B2B and B2C Online Media & Technology, Marketing & Interactive Services, and Mobile Media & Technology sectors accounting for 75% of total deals in Q1 2011 vs. 70% in Q1 2010. The average deal size for these sectors rose as well, from $28 million in Q1 2010 to $47 million in Q1 2011.

Looking at the Top 10 Deals

The interactive markets accounted for 7 of the 10 largest deals of the quarter, including the only multi‐ billion dollar deal announced – eBay’s acquisition of GSI Commerce for $2.4 billion. The other six announced interactive deals in the top 10 included:

  • Walgreen acquired, an online retailer of health and beauty products, for $409 million;
  • Tencent of China acquired RiotGames, a developer of premium online games, for $400 million;
  • acquired Radian6, a social media monitoring company, for $326 million;
  • AOL acquired Huffington Post, an online news and opinion web site, for $315 million;
  • GSI Commerce acquired Fanatics, a network of sports e‐commerce sites, for $277 million; and
  • Nordstrom acquired HauteLook, a private, limited‐time e‐commerce site, for $270 million.

Interestingly, two of the largest transactions of the quarter took place in the consumer publishing market, which has been a relatively quiet sector over the past few years:

  • Hearst Corporation’s acquisition of Lagardère’s magazine portfolio for $651 million; and
  • Apax Partners’ acquisition of Yellow Media’s Trader Corp., a producer of consumer shopper publications, for $745 million.

The remaining deal in the top 10 for Q1 2011 took place in the fast‐growing healthcare market:

  • inVentive Health, owned by private equity firms Thomas H. Lee and Liberty Lane Partners, acquired i3, a pharmaceutical services company, for $400 million.

Looking Forward

JEGI Managing Director Michael Marchesano is upbeat about M&A activity in the Healthcare Information & Technology market, where deal value more than doubled in Q1 2011 vs. Q1 2010. In “Healthcare Information & Technology M&A” (, featured in JEGI’s March 2011 Client Briefing newsletter, Mr. Marchesano discusses new products and services that are driving change throughout this vibrant sector. These are spurred in part by a wave of upstart niche players that are developing new technologies and tools to capture and use data more productively. Mr. Marchesano expects M&A activity in this sector to ramp up in the years ahead, as major strategic players tap into new sources of efficiency and growth. Accordingly, JEGI has expanded its coverage of Healthcare Information & Technology, which is now shown separately in JEGI’s quarterly M&A table (on page 3 of this report – see the PDF of this release).

Overall, media, information, marketing services and technology executives reflect a positive outlook on growth. In fact, JEGI’s first annual Media Growth Survey, with insights from nearly 500 senior industry executives, revealed that more than 80% of them identified organic growth as the primary growth driver in the next 12 to 24 months.

M&A activity is also seen as a vital growth driver for larger companies: 81% of respondents at organizations with more than $250 million in revenue foresee making an acquisition in the next 12 to 24 months. Large companies don’t have a monopoly on M&A, as more than half of mid‐sized organizations also plan to make an acquisition in the near‐term. Review the complete report at:

Clouds hanging over the M&A market include continued hesitancy by the banks to lend on smaller transactions; lingering uncertainty about the economy, given the continuation of unemployment levels at 9+% in the U.S. and unrest in a number of states; and increasing turmoil in the Middle East and North Africa, as citizens rise up to overthrow their governments.

The good news is that liquidity has returned to the debt markets and volumes in the bank market tripled in 2010 vs. 2009 – from $75 billion to $233 billion, according to Dan Damon, Managing Director, GE Capital Markets, who spoke at JEGI’s Media & Technology Conference in January. Review Mr. Damon’s entire presentation at:

JEGI Activity Continues

JEGI completed three transactions in the quarter, including a high‐profile deal in the e‐commerce space: the sale of Journalism Online, an e‐commerce platform that helps publishers charge for content, to R.R. Donnelley. JEGI’s two other transactions included:

  • The sale of Wolters Kluwer’s Summers Press, a leading provider of safety and compliance information products, to Mancomm; and
  • The sale of Weaver Multimedia, a provider of integrated marketing solutions serving the convention, meeting, and visitor travel industries, to Miles Media.

JEGI expects continued strong activity in middle‐market M&A, as corporations look for high growth interactive, marketing services, mobile and technology assets with innovative business models. In parallel, many private equity portfolio companies that were acquired during the major buying cycle of the early and mid‐2000’s are expected to come to market over the next year. JEGI continues to have a robust and active pipeline and expects a number of noteworthy transactions to close in the remainder of 2011.

M&A Highlights

  • The b2b online media and technology sector saw a 39% decrease in the number of M&A transactions announced in Q1 2011 vs. Q1 2010, but a more than sixfold increase in deal value to $2.8 billion, led by eBay’s acquisition of GSI Commerce for $2.4 billion. Other notable Q1 transactions were Great Hill Partners’ acquisition of All Web Leads, an online lead generation company for the US insurance industry, Google’s acquisition of Next New Networks, an online video production company, and R.R. Donnelley’s acquisition of Journalism Online. KIT Digital, a leading global provider of video asset management solutions, completed four acquisitions totaling more than $110 million in the quarter, including KickApps, Kyte, Kewego, and Polymedia.
  • The b2c online media and technology sector was the most active in Q1 2011, with 78 transactions at a total value of $3.4 billion. M&A transaction volume increased 30% over Q1 2010, while deal value nearly quadrupled. The largest Q1 transactions included AOL’s acquisition of Huffington Post for $315 million; the acquisition of Fanatics by GSI Commerce for $277 million; Nordstrom’s purchase of HauteLook for $270 million; the acquisition by Chinese portal Tencent of Riot Games for $400 million; and Walgreen’s acquisition of for $409 million. Other notable deals in the quarter included Visa’s acquisition of PlaySpan, a virtual goods company, for $190 million; AOL Europe’s acquisition of GoViral, a distributor of branded video content, for $96 million; France Telecom’s acquisition of 49% of Dailymotion, an online video sharing site, for $82 million; BBC Worldwide’s acquisition of Lonely Planet, an online travel guide publisher, for $67 million; and’s acquisition of, an online dating company, for $50 million.
  • M&A activity for the business‐to‐business media sector was nearly non‐existent in the first quarter of 2011, with only four deals completed at a total value of $15 million. This compared to 13 deals valued at $66 million in Q1 2010. In Q1 2011, Wolters Kluwer sold its Summers Press safety and compliance information products to Mancomm; Access Intelligence acquired OR Manager, a media company serving operating room executives, managers and doctors; and United Business Media sold Publican, a weekly magazine for the UK licensed trade, to William Reed.
  • The consumer magazine sector came to life in Q1 2011, with seven transactions at a total value of $1.4 billion. Two transactions drove the bulk of deal value in the quarter, as Hearst Corporation acquired Lagardère’s magazine portfolio for $651 million, and Apax Partners acquired the Trader Corp. division from Yellow Media for $745 million. Notably, Magic Johnson Enterprises and Ron Burkle’s The Yucaipa Cos. acquired Vibe Holdings from InterMedia Partners, and Dennis Publishing acquired Mental Floss, a bimonthly magazine for students obsessed with trivia.
  • The database and information services sector quieted in Q1 2011, recording 11 transactions for a total value of $384 million, compared to 19 transactions valued at $3.1 billion in Q1 2010. Notable transactions included Nielsen’s acquisition of MEMRB (The Middle East Market Research Bureau) for $82 million; the acquisition by Dawson Geophysical of TGC Industries, a seismic data company, for $157 million; and Blackbaud’s acquisition of Public Interest Data, a provider of data management services to nonprofits, for $17 million.
  • The education information, technology and training sector saw 12 transactions announced at a total value of $463 million in Q1 2011. While there were a similar number of transactions in Q1 2011 vs. the same quarter last year, transaction value for this sector decreased 74%, from $1.8 billion in Q1 2010. In Q1 2011, the most notable deals were completed by Pearson – the acquisitions of TutorVista, a provider of quality online tutoring, for $127 million and Education Development, a provider of education and training qualifications and assessment services, for $113 million.
  • The exhibitions and conferences sector saw six transactions at a total value of $34 million in Q1 2011, posting similar results to Q1 2010. United Business Media continued to be active on the international front, announcing the acquisition of two India‐based exhibitions and conferences businesses: SATTE, a travel exhibition company; and Famdent, a producer of dental events. Reed Exhibitions also made an international deal in the quarter – the acquisition of Mulitplus Fairs & Events, a Sao Paulo‐based organizer of ethanol manufacturing events.
  • Deal value more than doubled in the healthcare information and technology sector, led by inVentive Health’s acquisition of i3 for $400 million. Other notable deals in the quarter included two transactions by Elsevier – the acquisitions of Oncology Journal Portfolio, a series of journals that provide peer‐ reviewed research and articles, and Datong, a provider of drug decision support. Two private equity firms made platform acquisitions in the quarter: SFW Capital Partners acquired MD Buyline, a provider of information and analyses to healthcare services companies; and Webster Capital acquired Conisus, medical communication services to oncology pharmaceutical and biotechnology industries.
  • The marketing and interactive services sector was the second most active in the first quarter of 2011, with 60 transactions at a total value of $2 billion. Deal activity increased 13% over Q1 2010, while deal value declined 31%, as fewer larger transactions were announced. Notable Q1 transactions included’s acquisition of Radian6 for $326 million; Teradata’s acquisition of Aster Data Systems, a data and analytics platform, for $263 million; and Adobe’s acquisition of Demdex, a data management platform. Other noteworthy deals included the acquisition of Sarvis, a provider of merchandising and headquarter sales services, by Advantage Sales & Marketing; Riverside Company’s acquisition of Pareto, a shopper marketing company that offers marketing execution solutions; and ITWP’s acquisition of Toluna, an online market research panel and survey software provider.
  • Mobile media and technology, which has been among the fastest growing sectors over the past few years, slowed in Q1 2011, with 23 deals announced at a total value of $469 million. These figures were down 15% and 37%, respectively, vs. Q1 2010. Mobile acquisitions are primarily of earlier stage, high‐ growth companies by corporations that are seeking growth in new markets and new product offerings. Few private equity firms have yet ventured into this market. In Q1, notable deals included: Concur’s acquisition of TripIt, mobile trip management software, for $120 million; HTC’s acquisition of Saffron Digital, a mobile content delivery service, for $49 million; and Motricity’s acquisition of Adenyo, a mobile marketing software company, for $100 million. Clear Channel Radio, Facebook, Olson, OpenText, Tremor Media and Verve Wireless were all active acquirers during the quarter.

About JEGI

The Jordan, Edmiston Group, Inc. (JEGI) of New York, NY is the leading provider of independent investment banking services for the media, information, marketing services and technology sectors. Since 1987, JEGI has completed more than 500 high‐profile M&A transactions for global corporations; middle‐ market and emerging companies; entrepreneurial owners; and private equity and venture capital firms. For more information, visit

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