Berkery Noyes Releases 2011 Year End Online & Mobile Industry Mergers and Acquisitions Report

Berkery Noyes, an independent middle market investment bank, has released its 2011 Full Year Mergers and Acquisitions Trend Report for the Online & Mobile Industry. The report analyses the sector for 2011 and compares it with similar activity in 2009 and 2010.

Median revenue and EBITDA multiples increased from 2010 to 2011. The median revenue multiple went from 1.9x to 2.4x, a 26 percent rise, while the median EBITDA multiple increased from 11.4x to 12.5x. There were 1531 strategic transactions, an increase of 33 percent compared to 2010. Total volume in the Online & Mobile space increased 33 percent over 2010, from 1299 to 1723 transactions.

“M&A activity for social media and analytics companies continues to grow as a broader range of players seek to capitalize on this evolution in media and marketing communications,” said Kathleen Thomas, Managing Director at Berkery Noyes. “The world’s largest retailer, Walmart, entered the market in April with their $300 million acquisition of Kosmix Corporation, and Kosmix, now known as @WalmartLabs, has already completed four deals.”

@WalmartLabs, which is now the retailer’s digital technology division, has been building what they call “the future of commerce” through their “Social Genome,” a database combining billions of tweets, YouTube videos, Facebook messages and more. They claim this will assist shoppers with making decisions through “a broad array of social commerce applications” and ultimately help Walmart achieve greater margins and sales.

Total acquisitions involving social media and analytics companies rose 39% from 116 transactions in 2010 to 161 in 2011. The median revenue multiple for this sector between 2009 and 2011 was 5.5x.

A copy of the Full Year 2011 Online & Mobile Industry Mobile Industry M&A Trend Report is available at the Berkery Noyes website.

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Berkery Noyes releases 2011 Year End Media Trends Report

2011 Key Highlights

  • The largest announced transaction for 2011 was West Australian Newspapers’ acquisition of Seven Media Group, a portfolio company of Kohlberg Kravis Roberts & Co., for $4.15 billion.
  • The segments with the largest disclosed median enterprise value multiples for 2011 were Broadcasting with 3.8x revenue and Internet Media at 17.5x EBITDA.
  • There were 174 fi nancially sponsored transactions with an aggregate value of $11.05 billion, representing 12 percent of the total volume and 20 percent of the total value, respectively.

2011 Key Trends

  • Total transaction volume in 2011 increased by 15 percent over 2010, from 1225 in 2010 to 1409 this year.
  • Total transaction value in 2011 increased by 41 percent over 2010, from $38.31 billion in 2010 to $54.12 billion this year.
  • The median revenue multiple rose from 1.5x in 2010 to 1.9x in 2011. The median EBITDA multiple moved slightly from 10.4x to 10.6x.
  • The segment with the largest increase in volume in 2011 over 2010 was Marketing with a 29 percent increase from 332 transactions in 2010 to 428 transactions in 2011.

M&A Market Overview

  • Berkery Noyes tracked 3572 transactions between 2009 and 2011, of which 1013 disclosed fi nancial terms, and calculated the aggregate transaction value to be $119.95 billion. Based on known transaction values, we project the value of the 2550 undisclosed transactions to be $25.33 billion, totaling $145.27 billion worth of transactions tracked over the past three years.
  • The largest transaction tracked by Berkery Noyes between 2009 and 2011 was Comcast Corporation’s acquisition of NBC Universal, a subsidiary of General Electric Company for $22.85 billion, which was announced in 2009 and closed in 2011.
  • The most active acquirer by volume in the Media and Marketing industry between 2009 and 2011 was Publicis Groupe SA with 39 transactions, 24 of which were announced or closed in 2011.

Visit the Berkery Noyes website to download the full report

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AdMedia’s Industry Survey – 2012 Mergers and Acquisitions Prospects for Media, Marketing Services and Related Technology Firms

AdMedia Partners has released its latest industry survey, “2012 Mergers and Acquisitions Prospects for Media, Marketing Services and Related Technology Firms.’

The report reveals the viewpoints of buyers and sellers regarding 2012 valuations, advertising spending, M&A activity, and key trends affecting all industry participants, such as the changing nature of content delivery, consumption and monetization.

Respondents were generally optimistic about prospects for their industries and their own businesses in the year ahead, and expect that strong M&A activity in 2011 will continue into 2012. They believe there will be an increase in M&A activity driven by strategic buyers with historic amounts of cash on their balance sheets, private equity firms with large amounts of uninvested capital and changing industry dynamics.

Specific survey findings include:

  • Fifty-nine percent of respondents expect to seek an acquisition, up markedly from last year when 40% had the same expectation.
  • Highlighting the fact that significant capital is sitting on the sidelines, 55% of respondents who anticipate making an acquisition expect to fund using existing cash reserves; in addition, 43% expect to raise outside equity (e.g., from a private equity firm) and 27% plan to use debt financing.
  • Almost half of respondents (48%) anticipate contemplating the sale of their company and/or subsidiary operation in 2012, a significant increase over the 36% who expressed this opinion in 2011.
  • Approximately three out of four respondents anticipate that M&A by strategic buyers will be up in 2012.
  • Almost half of respondents anticipate that M&A by financial buyers will be up in 2012.
  • The most popular areas of expansion interest within the services sector were analytics, social and mobile. User-generated content and mobile were hottest topics for content respondents.
  • Respondents predict that valuations will remain strong in 2012, particularly for mobile marketing, social marketing, and digital media firms.

Visit the AdMedia Partners website to download a full copy of the report.

mergermarket Q3 Monthly M&A Insider report

According to the mergermarket Q3 Monthly M&A Insider report (October 2011), global m&a in the first three quarters of 2011 totalled us$1,718bn – a 21.5% increase from the us$1,414.4bn worth of deals registered in the first three quarters of 2010 – and the financial services sector saw an even steeper 37.4% increase during this nine-month window. The first three quarters of 2011 brought us$208.5bn in financial services deals to market, up from us$151.7bn in the same period last year,

Sectors covered by Fusion DigiNet

The largest sector by market share was Energy, Mining and Utilities at 23.1% (835 deals) down 10% (-125 by volume), in 7th place is Business Services at 4.4% (1,159 deals) -17% (+62 by volume), media is in 8th place at 1.9% (279 deals) +23% (no change by volume).

See the full report at mergermarket

Berkery Noyes releases third quarter 2011 M&A Update for the Media & Marketing Industry

Berkery Noyes has released its Third Quarter 2011 Mergers and Acquisitions Update for the Media & Marketing Services Industry.

The report analyses merger and acquisition activity in the sector across the three-month period and compares it with similar activity for the six previous quarters.

Overall, the report showed third quarter transaction volume in the Media & Marketing Services Industry increased 14 percent over the previous period, a partial recovery from the second quarter’s 24 percent decline. Transaction value, however, fell 23 percent in the third quarter, sliding from $13.5 billion to $10.4 billion.

Enterprise value multiples have been rising on a yearly basis according to Berkery Noyes research. Third quarter transactions in the Media & Marketing space commanded a median EBITDA multiple of 14.5, a 58 percent increase over the previous quarter, and a revenue multiple of 2.2, which continues to be the highest revenue multiple in the last seven quarters.

Publicis Groupe SA announced the most acquisitions in the Media & Marketing sector, with a total of 17 transactions year-to-date according to the report. The firm’s most recent purchases include Schwartz Communications, Inc., one of the largest independent public relations agencies in the U.S., and DPZ, one of Brazil’s leading advertising agencies.

“Interestingly, DPZ was Publicis Groupe’s third acquisition this year in Brazil,” said Berkery Noyes Managing Director Evan Klein. “As one of the top ten ad markets in the world, I have to think Brazil will continue to garner interest from advertising agencies in the near term.”

Third Quarter Key Highlights

  • The most active acquirer through Q3 2011 was Publicis Groupe SA with 17 acquisitions, including the acquisitions of Schwartz Communications, Inc., and DPZ during Q3 2011. Publicis Groupe SA also became majority stakeholder in Big Fuel Communications, LLC, and Spillmann/Felser/ Leo Burnett.
  • The largest Q3 2011 transaction was Bloomberg L.P.’s acquisition of BNA, Inc. for $963 million.
  • There were 124 financially sponsored transactions in the 1st 3 Quarters of 2011, with an aggregate value of $8.74 billion, representing 12 percent of the total volume and 24 percent of the total value, respectively.

A copy of the Third Quarter 2011 Media & Marketing Services Industry M&A Update is available here.

USA, New York, NY

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Report: Quarterly analysis of UK-headquartered private equity control deals in the £10 million to £100 million segment

  The volume and value of deals completed during the first nine months of 2011 in the lower mid- market investment space has increased year on year for the past three years, according to research from Lyceum Capital and Cass Business School.

For more information, visit the Lyceum Dashboard

Data from The UK Growth Buyout Dashboard – a quarterly analysis of UK-headquartered private equity control deals in the £10 million to £100 million segment – shows that 63 transactions completed between 1 January 2011 and 30 September 2011. This compares to 50 investments for the same period of 2010 and just 25 during the first nine months of 2009.

During Q3 2011, deal volume has built on an encouraging first six months of 2011 with a greater number of deals completed than in Q2. The combined value of those deals fell slightly (from £794 million to £785 million) but both volume and value of deals was still higher than the same quarter of 2010.

Q3 deal value being lower than Q2 despite five more transactions, indicates that there are fewer large deal opportunities however the lower mid-market continues to replenish itself as new businesses enter the space looking to grow with private equity investment.

Transaction sizes

The combined deal value of £785 million exceeds the £698 million recorded during Q3 2010 and the £220 million of Q3 2009.

The highest transaction value recorded in the last three months was £87.8 million, compared to a high of £100 million in Q2 H1 2010.

Meanwhile, transactions valued between £50 million and £100 million fell from seven in Q2 to five in Q3. The majority of the 22 lower mid-market deals completed were in the £26 million – £50 million range, with 86 per cent under £50 million.

The increase in deal activity indicates that there is a growing appetite for investment and that transactions should continue to rise unless there is a significant reversal in the state of the wider economy. There may not currently be the appetite for the larger end deals in the mid-market space but as long as volume maintains its upward trend, the necessary deal flow which keeps the market moving does exist.

Transaction types

Management buyouts (MBOs) and secondary buyouts (SBOs) remained the most prevalent transaction types for private equity investors, but the number of MBOs completed in Q3 2011 actually fell to nine from 12 in Q3 2010 – lower than each of the previous six quarters back to Q1 2010.

There were also two public to private delistings during Q3, compared to one in each of the previous two quarters.

No Initial Public Offerings (IPOs) were recorded, a trend which stretches back to Q1 of 2010 and is unsurprising in a financial climate of weak capital markets where so many anticipated floats have been shelved.

Trade, IPO and secondary exits

A total of nine secondary buy-outs (SBOs) characterised the quarter – the highest number of any quarter during the last two years and an indication that private equity firms are now beginning to sell assets that they have held onto throughout the depths of the economic downturn.

There were six exits to trade, higher than the previous two quarters but lower than the eight which took place in Q3 2010.

Investments by industry

Technology, media, telecommunications (TMT) businesses continue to dominate the lower mid- market with eight out of 22 deals this quarter (38 per cent) and five transactions in business support services.

Retail – undoubtedly one of the sectors hardest hit by a dip in consumer spending – continues an encouraging run of three deals or more completing in every quarter since Q2 2010.

Commentary

Andrew Aylwin, Partner at Lyceum Capital, said: “In the £10m to £100m value range, UK private equity deal volumes continue to recover. With 63 completed transactions so far for the 9 months to 30th September, the market is trending back to historical norms of 100+ control deals a year. The UK lower mid-market segment remains a plentiful source of high quality opportunities across a range of sectors and private equity firms such as Lyceum Capital continue to play a key role in supporting dynamic companies that need capital to continue their successful development and drive the recovery of UK plc.”

Professor Scott Moeller at Cass Business School commented further: “This performance of the UK lower- mid market in the third quarter is in distinct contrast to the overall market when much larger deals of £100 million plus are considered. That market has declined during the past two quarters and some reports show it declining dramatically in Q3 – Bloomberg, for example, this week reported a 43 per cent decline in deals with European purchasers for the overall market. Therefore, the volume of deals in the lower mid market is encouraging in this difficult economic environment, and may prove in the next quarter to continue to be resilient. There is further evidence in our figures of a positive shift in the market with a strong mix of industries, including healthcare, which was absent last quarter and a resurgence in technology deals.”

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Half Year Mergers and Acquisitions Trends Report for Private Equity in the Information Industry

Berkery Noyes has released its Half Year Mergers and Acquisitions Trends Report for Private Equity in the Information Industry.

The report analyses merger and acquisition activity in the private equity market over the first half of 2011 and compares it with activity in the four previous sixth-month periods. Berkery Noyes includes in this report transactions made by financially sponsored acquirers within the Information Industry, including purchases made by subsidiaries or platforms of private equity firms.

Berkery Noyes data shows that transaction volume and aggregate value rose considerably over the second half of 2010.  Transaction volume gained 11 percent in the first half of 2011, rising to 171, while value rose a considerable 21 percent in the first half, hitting $11 billion.

“The data shows that the private equity market continues to improve in the number of completed deals from the trough of 2009,” said John Shea, COO of Berkery Noyes. “The upward trend has been lumpy, however, and will probably continue that way for some time.”

The report also highlights the activity of Thomas H. Lee Partners within the information industry this half as the most active financial acquirer, with 10 acquisitions.  Thomas H. Lee Partners also announced the highest valued transaction this half, the pending acquisition of Acosta, Inc., a subsidiary of AEA Investors LP, for $2 billion.

A copy of the First Half 2011 Private Equity Industry M&A Report is available here.

USA, New York

 

Half Year M&A Trends Report for the Financial Technology and Information Industry

Berkery Noyes has released its Half Year Mergers and Acquisitions Trends Report for the Financial Technology and Information Industry.

The report analyses merger and acquisition activity in the Financial Technology and Information market over the first half of 2011 and compares it with activity in the four previous sixth-month periods. This market includes information and technology companies in capital markets, payments, banking, insurance and other related professional financial services.

Berkery Noyes data shows that while total transaction volume for the period remained largely unchanged, transaction value nearly tripled, jumping from $7.0 billion in 2nd Half 2010 to $19.5 billion this period. The 187 percent increase can be attributed primarily to Deutsche Borse Group’s announced merger with NYSE Euronext for $12.4 billion.

Fiserv, Inc., a leading provider of financial technology solutions, was the most active acquirer in 1st Half 2011, with four purchases: CashEdge, Inc., Credit Union On-Line, Inc., Mobile Commerce Ltd, and Maverick Network Solutions.

For the full two-and-a-half period covered by the report, Morningstar, Inc., was the sector’s most active acquirer. The investment research and financial news provider made nine acquisitions.

A copy of the First Half 2011 Financial Technology and Information Industry M&A Report is available here.

USA, New York

 

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Berkery Noyes releases its Half Year M&A Trends Report for the Online & Mobile Industry

Berkery Noyes has released its Half Year Mergers and Acquisitions Trends Report for the Online & Mobile Industry.

The report analyses merger and acquisition activity in the segment across 1st Half 2011 and compares it with activity for the four previous sixth-month periods from 2009-2010.

According to Berkery Noyes research, the Online & Mobile Industry’s robust growth over the past two and a half years continued across the last six months. Total volume in 1st Half 2011 increased by 23 percent over the previous six-month period, from 643 transactions to 788. Total transaction value increased even more significantly, climbing from $28.5 billion in 2nd Half 2010 to$43.3 billion in 1st Half 2011, a 52 percent jump.

Price multiples rose in step with this increasing activity, with 1st Half 2011 Online & Mobile transactions commanding a median EBITDA multiple of 15.3 and a revenue multiple of 2.1. Both of these numbers represent 30-month highs for the segment.

Google, Inc. remained acquisitive in the sector, purchasing 11 companies over the first half of the year, bringing its two-and-a-half year total to 39. The firm’s most recent purchases represented a wide range of companies and technologies in the Online & Mobile sector, including social network analytics, search engines, and messaging services.

The largest transaction during 1st Half 2011 was Microsoft Corporation’s announced acquisition of Skype Technologies SA from an investor group led by Silver Lake Partners for $9.08 billion.

A copy of the First Half 2011 Online & Mobile Services Industry M&A Report is available at the Berkery Noyes website.

USA, New York

Survey of Private Equity fund managers indicates improved optimism – Rothstein Kass’s Private Equity in 2011 report

Global professional services firm Rothstein Kass, has published “Private Equity in 2011,” a sector trends report that features the findings of an Internet survey of 207 private equity fund managers. Conducted in January 2011, the survey covered issues ranging from fundraising intent to regulatory concerns.  Sixty-five percent of managers participating worked at funds with assets under management (AUM) below $500 million, with 35 percent indicating AUM in excess of $500 million.

Among notable findings, nearly 80 percent of respondents indicated that there will be more attractive investment opportunities in 2011 than in 2010. Meanwhile, 67 percent suggested that there will be increased IPO activity by private equity portfolio companies this year. While a more stable economy and thawing capital markets are contributing to a general sense of optimism, managers polled also acknowledged challenges ahead. Roughly 45 percent of respondents indicated that the credit crisis would continue into 2012 or beyond. Nearly 86 percent agreed that provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act will increase compliance costs for private equity funds.

Read the report here

USA, Roseland NJ

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