Investment bank Petsky Prunier tracked 174 merger or acquisition transactions within the marketing, advertising and digital media industries. The transactions were valued at $2.8 billion, or slightly more than $16 million each.
A year ago, during first-quarter 2008, Petsky Prunier reported 193 transactions, with a total value of $11.4 billion, or, on average, just over $59 million apiece.
“The decline in dollar volume was primarily due to the lack of liquidity in the market, resulting in private equity firms unable to leverage and complete transactions,” according to a statement from Petsky Prunier.
Petsky Prunier examines seven broad segments in its quarterly Deal Notes analysis: Interactive Advertising, Advertising and Promotion, Out-of-Home and Specialty Media, Marketing Technology, Digital Media, Information and Marketing Services.
Within the seven segments Petsky Prunier examines, Marketing Technology was the most active this quarter, with 54 transactions value at approximately $1.3 billion in value. Marketing Technology sub-segment Content Management, which has had at least nine transactions in each of the last four quarters, saw eight deals during the quarter worth approximately $680 million.
The Digital Media segment was the second most active segment this quarter with 49 transactions worth approximately $480 million. Within Digital Media, Niche Content was the most active sub-segment with 16 deals. Notable transactions included Alloy Media’s acquisition of Takkle.com, HealthCentral Network’s acquisition of Wellsphere and Total Beauty Media’s acquisition of BeautyRiot.
During first-quarter 2009, user-generated/social media targets attracted seven investments and three acquisitions, including Twitter’s $35 million capital raise led by Benchmark Capital and Institutional Venture Partners, and Saint Capital’s acquisition of secondary shares in Facebook for an undisclosed amount.
Within the Interactive Advertising segment, the Mobile Advertising subsegment was the most active and recorded five transactions this quarter for approximately $55 million.
During the last 12 months, venture capital investors have invested nearly $200 million in 10 companies. According to Petsky Prunier, the volume and dollar amount indicates good tidings for mobile advertising’s long-term prospects.
Venture capital investors accounted for the largest portion of deal volume in Q109, with 92 transactions (53% of total) worth an estimated $850 million. Strategic buyers accounted for the largest portion of transaction dollar volume, with slightly more than $1 billion, or 49%, of the quarter’s total. WPP was the most active strategic buyer and announced three transactions, followed by IAC and News Corp., which completed two acquisitions apiece.
The Bean-Counter’s Take: Here’s a challenge for the folks at Petsky Prunier, or anyone else who feels like going through some financial statements: How have goodwill margins – the amount paid for a company above the value of its physical assets – change during the last year or two? Also: Part of the reason the value of the transactions is down may be the overall drop in the stock market. When transactions are share-swap-based, in today’s climate they’re gonna have lower value.
