Investment bank Berkery Noyes’ first-half report for 2014 shows total value for mergers and acquisitions (M&A) in the media and marketing industry up on a half-year basis, from $45.8 billion to $49.8 billion.
Total value of M&A in the industry had a sharp 70% increase compared with the first half of 2013, which had a total value of $29.5 billion.
But the overall growth belies another trend: a shift to smaller transactions. The report – which includes known and projected transactions – showed 82% of all transactions for the half were in deals valued under $55 million.
The large share of smaller deals in the overall M&A landscape has been of concern to some investors.
A recent report by Jordan Edmiston Group (JEGI), an investment bank, saw deals of less than $50 million comprise 83% of total volume in the media, information, marketing and technology industries. JEGI said in the report that the share of volume for smaller deals suggests “that corporations and investors are vigorously exploring acquisition opportunities but remain cautious to ‘pull the trigger’ on larger transactions as they wait for a clearer picture of the economy’s direction.”
The marketing segment saw the biggest increase in activity compared to second half 2013, with a 7% increase in transaction volume making up 36% of total industry volume this year. Transactions in the digital marketing space made up 41% of volume in the marketing segment.
Internet media saw a rise in the value of deals compared with first half 2013, from $5.6 billion to $7.9 billion, a rise of 41%. This despite a drop in the volume of deals of 8%. Leading the rise in deal values were Hellman & Friedman’s acquisition of Internet Brands for $1.1 billion and YouTube’s acquisition of Twitch Interactive for a reported $1 billion.
The Berkery Noyes report includes data from 162 known transactions and estimated data from 688 projected transactions from the first half of this year.
Correction 7/14: The original version of this article described Lotame’s purchase of DMP Knotice. IgnitionOne bought Knotice and DMP Lotame bought cross-device targeting company AdMobius. The changes have since been edited into the article.