Even though 2008 was a slower year for digital media M&A, about $0.88 of every dollar of industry revenue growth flew to four growth sectors: Database & Information; B2B Online Media; Consumer Online Media; and Interactive Marketing Services. Only $0.12 flowed to traditional media, according to an analysis by media M&A advisory firm The Jordan, Edmiston Group. This compares to $0.67 of every incremental ad dollar flowing to traditional media sectors (newspapers, magazines, events, etc.) from 2001 to 2007, while only $0.33 went to these four growth sectors.
Some other highlights:
— Multiples: The all-important metric for an entrepreneur: The four growth categories saw average revenue and EBITDA multiples range from 3.4x to 4.5x and 13.5x to 21.3x, respectively, in 2008, as compared to 1.5x to 2.4x and 8.0x to 8.5x, respectively, for traditional media sectors.
— Deal numbers: Deal count and value declined 35 percent and 58 percent, respectively, in Q4 2008 versus Q4 2007. For the full-year, deal count was down 13 percent and deal value declined a significant 68 percent from 2007 highs.
Average M&A Multiples in Media/Info Sector in 2008:
Full Disclosure: JEGI has been a sponsor of ContentNext.