Q1 M&A Deal Size Rises, As Does Interest In Shopper Marketing Data

MAwrapMarketing M&A deal activity increased 22% year over year, marking one of the highest volume quarters on record, according to new data from mid-market investment bank Berkery Noyes.

On a quarterly basis, media and marketing transaction volume increased by 3% from 423 to 434 deals; average deal size also climbed, increasing from $25.1 billion to $25.8 billion in the quarter.

“Although aggregate value was consistent over the past quarter, it more than tripled compared to Q1 2013,” said Evan Klein, managing director of Berkery Noyes’ media, marketing services and technology practice. “This is a positive sign that media/marketing deal activity should continue to remain robust.”

The current debt-to-equity ratio in the marketplace today is also conducive to M&A, the report said.

Berkery Noyes breaks down media and marketing transaction analysis by market segments that include marketing, Internet media, consumer publishing, entertainment and content, B2B publishing and information, broadcasting and exhibitions, conferences and seminars.

“The digital marketing subsector was responsible for much of the activity and accounted for 41% of the segment’s volume in Q1 2014,” Klein noted. “The lines between content, marketing, and advertising are blurring, which has become evident when looking at WPP and other acquirers that are active in the space.”

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Berkery Noyes’ findings echo a Q1 M&A report focused on media, information, marketing and technology sectors from investment bank Jordan, Edmiston Group Inc. (JEGI)’s.

JEGI found marketing services and technology accounted for 41% of all deal volume, with marketing technology in particular comprising 30% of the total deal value in that sector.

Acquisitions of note include Oracle’s reported $350 million-$400 million purchase of BlueKai, Verint Systems’ $514 million acquisition of KANA Software and Thoma Bravo’s $930 million snap-up of travel-sector business intelligence platform TravelCLICK.

Shopper marketing transactions were particularly hot in Q1, accounting for 26% of sector deal value. According to JEGI, the big deal driving this percentage was Berkshire Partners’ placing an estimated $2 billion majority stake in Catalina Marketing Corp.

But the Catalina deal wasn’t the only one. Other loyalty marketing deals include Tesco-owned Dunnhumby’s planned purchase of retail retargeter and DSP Sociomantic.

“The ability to better profile, target and exploit consumer [data] has necessitated the development and growth of companies that can analyze shoppers’ behavior and develop appropriate offerings to the consumer,” Klein explained. “Broadly speaking, this shift has led to the growth of data analytics companies, and with the need to develop deeper relationships with consumers, the growth in loyalty marketing companies.”

More M&A activity is likely to come, due to external factors. JEGI said a favorable debt market and rising business confidence could give way to more deals in media and marketing. Several more trends, including nontech companies snapping up tech startups to grow marketing and analytics skills internally (such as Dell’s deal to acquire advanced analytics company StatSoft or Staples’ purchase of personalization platform Runa), could spur further deal activity.

Additionally, the trend toward constructing an all-inclusive marketing stack or the acqui-hire to inject fresh talent, cannot be discounted, JEGI advised.


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