M&A Hits Prerecession Levels
M&A activity in the tradeshow and conference sector nearly doubled in 2012, compared with the previous year. In general, activity across all major media industry sectors skyrocketed to prerecession levels, according to a year-end report from investment banking firm The Jordan, Edmiston Group (JEGI).
Overall, deals for the 10 media and marketing sectors measured in the report totaled $74.7 billion in 2012, up 44 percent from last year and a five-year high. In raw volume, there were a record 1,351 sales—including a flurry in the fourth quarter as sellers raced to beat anticipated tax code changes in 2013.
There were 50 deals involving exhibitions and conferences in 2012 with a cumulative value of $874 million, an improvement over 2011 when there 32 deals worth $451 million.
“Live person-to-person marketing remains the most effective form and the form that is innovating, but not easily disrupted by digital,” says Tolman Geffs, a co-president of JEGI. “Certainly, exhibition and conference operators are leveraging digital in some interesting ways, but it doesn’t replace face-to-face quite the way that, for example, the internet blew away the classifieds business.”
The most significant transactions involving events were Advanstar Communications’ acquisition of ENK International’s fashion portfolio from Forstmann Little; ITE Group’s acquisition of Asian Business Exhibitions and Conferences’ 19 events in a range of verticals for $22.5 million; and GLM’s acquisition of Vertical Web Media’s events, including Internet Retailer Conference & Exhibition.
Nevertheless, none of the deals were major blockbusters. In fact, none of the events-related deals made it to JEGI’s list of 30 largest transactions. That list was topped by Alibaba’s acquisition of Yahoo’s interest in the online media business for $7.1 billion.
“The state of the media and marketing world is very healthy,” says Tolman Geffs, a co-president of JEGI. “You’ve got continued waves of innovation as emerging companies drive new forms of effectiveness and efficiency. On the other hand, you have both corporate and private-equity acquirers who are ready, able and very willing to tap into those new sources of growth.”
Broken down by category, b-to-b media was the largest percentage mover in the group. The sector shot up 143 percent in volume and an incredible 731 percent in dollar value, but at just $411 million (less than 1 percent of total M&A activity for the year), the small sample size accounts for much of that variation, according to Geffs.
Conversely, consumer magazines represented one of the slowest growth areas measured. Volume growth (up 34 percent) trailed the market average (50 percent) and, with purchase dollars plunging 91 percent, consumer magazines were the only group to suffer a decline in value. Sales totaled just $277 million in aggregate, down from $3.2 billion in 2011.
“That was due to the absence of a few really large deals,” Geffs says. “A couple large deals that were in 2011 didn’t happen in 2012. This sector has been quiet except for the occasional large transaction.”
Mobile media and technology broke through after stagnating last year, jumping more than 70 percent in both volume and value. The 124 deals accounted for almost $3.5 billion in 2012 and, according to Geffs, those numbers will increase next year.
“Mobile media is finally coming of age,” he says. “It’s now a part of the mix for any major marketer.”