Petsky Prunier: In 2010, Media M&As Rose Nearly 50 Percent

As the advertising recovery took hold in the latter half of 2009, acquisitions activity in the media space were expected to pick up markedly this year. Media investment bank Petsky Prunier took note of it in its year-end tally and found that mergers and fundings in the Marketing, Information
and Digital Media/Commerce segments were up 49 percent. It wasn’t just the amount of dealmaking that was much higher — Petsky Prunier tracked 1,019 transactions for a total of $51.5 billion — but the values were up significantly as well, as the collective dollars spent on deals increased 88 percent over 2009.

Some highlights from Petsky Prunier’s M&A overview:

— The Digital Media/Commerce category was the most active of the six areas Petsky Prunier looked at with 308 deals. Software & Information, with $16.7 billion in deal value, took in the most cash.

— Strategic buyers (e.g., AOL (NYSE: AOL), Publicis, IBM, Playdom and Zynga, all of whom bought more than five companies each) accounted for the largest portion of overall activity, with 606 transactions (59 percent of the year’s total volume) worth an estimated $33.1 billion (64 percent of total transaction value). Not surprisingly, Google (NSDQ: GOOG) was the most active strategic buyer with 17 transactions for the year. MDC Partners and Groupon acquired nine businesses each.

— There were 421 investments in 2010, worth a combined $6.1 billion. Compared to 2009, investment activity, in 2010 in the Marketing, Information and Digital Media/Commerce industries grew by 22 percent, while investment transaction value increased by 43 percent

— In Q4, Petsky Prunier tracked 426 M&A deals and investments worth approximately $19.7 billion, a huge 120 percent increase over the same period last year. Aside from Groupon’s year-end raise, the biggest deal this quarter was Twitter’s $200 million growth capital financing led by Kleiner Perkins Caufield & Byers.

— Although there was a lot of talk about IPOs this past year, the media business didn’t really see too much — Petsky Prunier counted only 18. The most notable filing, Demand Media, contained some pretty underwhelming information about the company’s business prospects. And Hulu appears to be holding off on its IPO, while Everyday Health canceled its planned filing in November. Despite the roadblocks surrounding IPOs in the media space, Petsky Prunier said this was all a matter of thing just getting started and 2011 should be a much bigger year for IPOs. More details about Petsky’s year in deals here (PDF)