JEGI: 2010 Media M&A Activity Was Up 39 Percent


Credit: Flickr / Tracy O

Fresh from its year-end work on the sale of interactive ad shop Blue State Digital to WPP, The Jordan, Edmiston Group offered up its view of 2010’s media M&A landscape and found 39 percent more deals than in 2009. The media investment bank tallied 845 transactions with a collective value of $43.3 billion. In comparison, fellow media i-bank Petsky Prunier said last week that it saw M&A’s rise by 49 percent, with 1,019 transactions for a total of $51.5 billion. Despite the disparity, both agree on one thing: the trends for 2011 are only looking higher.

Some of the highlights from JEGI’s report:

Strategic buyers owned 2010: Like Petsky, JEGI noted that it was by far a strategic buyers’ market last year. Corporate brands such as AOL (NYSE: AOL), Google (NSDQ: GOOG) and others led the way, as this group of acquirers conducted 86 percent of the year’s deals. And given the aggregate amounts of cash on their respective balance sheets, with the S&P 1500 holding more than $1 trillion and growing in liquid assets, these companies are likely to keep the media M&A surge going into 2011.

Debt struggles: Private equity firms have been holding on to huge amounts of uninvested capital – over $400 billion and growing. The ability for them to access debt is improving, but still remains a bit tough. The continued hesitancy of banks to lend is one cloud hanging over the market, especially in the area of smaller transactions, which JEGI identifies as those involving companies with less than $20 million EBITDA.

Small and plenty: Most of the deals last year were small, that is, under $1 billion. In fact, there were only six media and information deals valued over $1 billion in JEGI’s examination. The largest was the sale of data and analytics provider Interactive Data Corporation by Silver Lake Partners and Warburg Pincus for $3.2 billion — a deal that was done with large amounts of debt.

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