Marketing M&A Activity At Record Level In 2007: Study

The 758 mergers and acquisitions within the marketing sector were valued at $60.3 billion — record levels for both quantity and total worth of all transactions, according to Petsky Prunier LLC. Microsoft, which purchased 11 companies, was the most active dealmaker, followed by Google which consummated eight transactions and Landmark Communications and WPP Group, which racked up seven apiece.

There were 225 transactions within the digital services sector, with an aggregate value of $16.2 billion. The two largest deals included Microsoft’s purchase of aQuantive, and Google’s acquisition of DoubleClick. Six of the top 10 deals included ad networks/exchanges.

The direct and database sector racked up 161 deals valued at $18.6 billion. Production and mailing, as well as data and analytics segments were particularly active, racking up 35 and 34 transactions, respectively. Blackstone’s $7.9 billion acquisition of ADS Corp. (which owns Epsilon) was the largest single deal within any of the four marketing segments. Other significant acquisitions included Hellman & Friedman’s purchase of Catalina Marketing Corp., and One Equity Partners’ buyout of Vertrue, a loyalty services provider.

The 215 digital content and commerce deals generated $7.5 billion in total transaction value. Four of the largest deals involved companies in the user-generated content or social media spaces. Within this sector, Providence Equity’s $830 million purchase of comparison shopping firm NexTag was the largest deal. Microsoft’s $240 million stake in Facebook, which gave Facebook a $15 billion valuation, also fell into this category. Name-brand transactions within this sector included Fenway Partners’ purchase of 1-800-Contacts and Comcast’s acquisition of online movie ticket service Fandango.

The number of marketing technology deals more than doubled between 2006 and 2007, jumping from 61 to 157, for a total value of $17.9 billion last year. Much of this came from either the Internet/e-commerce or CRM categories. Within this sector, SAP’s $6.1 billion acquisition of analytics firm Business Objects, and IBM’s $4.1 billion purchase of Business Objects’ rival Cognos, were the two highest-value transactions.

According to Petsky Prunier, 2008 should bring similar increases in transactions, particularly among companies that offer digital services, provide digital media capabilities or build and organize marketing data.