DM M&A Activity Ends 2009 With A Bang
Direct marketing mergers, acquisition and investment activity during fourth-quarter 2009 was much higher than in the third quarter, according to investment bank Petsky Prunier.
The bank tracked 201 transactions, with an aggregate value of $13.5 billion, during the quarter. For the full year, the direct marketing community recorded 699 transactions, with a total value of roughly $26.1 billion.
Venture and growth capital investors cherry picked among the smaller deals during the fourth quarter: The 100 deals – half the total transactions – were worth $1.5 billion, or 11% of the quarter’s total value. Strategic buyers made 81 acquisitions during the quarter, with a net worth of approximately $4.2 billion.
Private equity firms were much more active during the fourth quarter than in the previous nine months: They spent $7.7 billion on 20 transactions during the quarter, compared with opening their purses to the tune of $1.2 billion for the 19 they engaged in during the first nine months of the year.
The digital media segment was the fourth-quarter’s most active, by the number of transactions: This sector saw 54 transactions valued at $2 billion, with Hellman & Friedman’s $350 million buyout of Web Reservations International, a travel-focused e-commerce company, leading the way.
The most active sub-segment within digital media was eCommerce with 17 transactions valued at $784 million. In 2009, venture and growth capital investors invested nearly $312 million in 22 e-commerce companies. Social gaming was the second most active sub-segment and recorded 10 deals in the quarter for $598 million.
Interactive Advertising was the second-most-active segment during the just-ended quarter, with the 47 transactions recorded by this sector worth $1.2 billion. Transactions included Google’s acquisition of AdMob for $750 million in stock; CheetahMail’s acquisition of United MailSolutions GmbH in Germany; and Adknowledge’s acquisition of Social Media Networks as well as several capital investments.
The software and information segment recorded 34 transactions, worth $7.0 billion. Market research and financial software were the most active sub-segments, with five transactions each. Texas Pacific Group’s $5 billion take-private transaction of IMS Health was the largest transaction in the segment. Other notable acquisitions included Equifax’s purchase of IXI Corp. for $124 million; e-Rewards’ acquisition of Research Now plc for $131.5 million; and JDA Software Group’s acquisition of i2 Technologies for $396 million.
“Investment activity across all stages improved in the fourth quarter accompanied by the first real uptick this year in private equity−backed buyouts, as leveraged finance began to return to the markets,” said John Prunier, partner at Petsky Prunier LLC, in a statement. “While investment activity trended up, mergers and acquisitions on the part of corporations remained relatively strong. Valuations for publicly traded companies currently are, on average, higher than at any point in 2009. Coupled with a desire on the part of chief executives to refocus on growth, we expect to see higher levels of mergers and acquisitions and investment activity continue into 2010.”
