Despite the slowing economy, mergers and acquisitions (M&A) activity within the online media and marketing industries continued at a steady pace in 2008. And although we may be seeing fewer billion-dollar-plus deals in light of the ongoing recession, there's little doubt that 2009 will witness its share of interactive industry consolidation as well.
To put 2008's interactive media M&A activity into perspective, we called on Tolman Geffs and David Clark, both managing directors with The Jordan, Edmiston Group Inc. (JEGI). Together, they provided the following insights on how recent transactions have altered online's competitive landscape. They also provided their outlook for 2009 activity, including a discussion of where we are likely to see the greatest amount of consolidation within the online media and marketing services sectors.
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Here is the link (http://tinyurl.com/6wynvb) to the Peachtree Media Advisors, Inc. year-end report summarizing the M&A activity in the interactive and out-of-home media sectors in 2008.
The highlights from online media M&A in 2008 are as follows:
In 2008, there were 707 merger, acquisition and capital raise transactions in the online sector of media (92 more transactions than the 615 in 2007). The 707 online media deals were comprised of 348 capital raise transactions and 359 acquisitions.
The $16.9 billion in reported deal value in 2008 represents a decrease of 62% from the $44.4 billion in reported M&A transaction value in 2007 for all of the U.S. online media sectors. The 2008 reported deal value by sector:
o Consumer - $6.2 billion (36.7%);
o Business – $4.8 billion (28.4%);
o Mobile - $592 million (3.5%);
o Enabling - $2.5 billion (14.6%); and
o Commerce - $2.8 billion (16.7%).
In 2008, $3.5 billion in reported deal value of venture capital flowed into all sectors of media, representing a 22% increase over the amount of reported $2.9 billion in capital raised in 2007. The Enabling category had the largest increase in the amount of capital raised attracting $892 million in 2008, which represents a 124% increase over the $398 million raised by the sector in 2007. The Mobile sector also saw significant gains in investment capital. The Mobile category raised $341 million in investment capital in 2008, representing a 488% increase over the $58 million raised by the sector in 2007.
The top five sectors in terms of volume of transactions (not reported deal value) for equity raises in 2008 were as follows:
o Video & Online Games – 59 capital raise transactions;
o Social Networking – 57 capital raise transactions;
o Web Applications/Enabling/IT – 47 capital raise transactions;
o Mobile – 35 capital raise transactions; and
o Blogging/User Generated – 27 capital raise transactions.
Feel free to give me a call at anytime to discuss and have an excellent New Year!
Best,
John
Peachtree Media Advisors, Inc.
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