While the number of transactions within the direct marketing community dropped from 550 in 2004 to 460 by the end of 2005, individual ticket prices rose. Transactions in the year just ended amounted to $46.1 billion, up from $27.2 billion. As DM-focused investment firm Petsky Prunier noted in its report, “The deals are getting larger, [and] the buyers becoming more aggressive.
In December alone, the industry racked up 36 transactions, totaling approximately $3.9 billion in value. The marketing services sector was the busiest with 17 deals, over two-thirds of which involved interactive companies such as Google’s $1 billion investment in AOL, Experian’s acquisition of PriceGrabber.com, CGI’s acquisitions of Litmus Media and iLead Media for a total of $48 million, and Merkle’s acquisition of Quris.
Of the 12 reported marketing technology transactions, 4 involved transaction-processing companies. The two largest deals in the sector were both go-private transactions - management buyout of iPayment for $926 million and Prides Capital-led buyout of Pegasus Solutions for $244 million. E-commerce platform companies were also active, with 4 transactions during the month.
The affinity, catalog and interactive segments of the multichannel marketer sector shared 7 transactions apiece during December, including Liberty Media’s $403 million acquisition of Provide Commerce and Sears Holdings’ $718 million acquisition of the 46.2% interest in Sears Canada that it did not already own from Natcan Investments. Petsky Prunier included only 10% of that deal, representing its conservative estimate of the catalog/Internet portion of the transaction.
