Global mergers, acquisitions in the media, information, marketing services and technology sectors in H1 up 52% year-over-year; transaction value up 49% to almost US$32B, yet almost 95% of transactions were valued at less than US$100M

NEW YORK , June 29, 2012 (press release) – Mergers and acquisitions in the media, information, marketing services and technology sectors continued at a fast clip in the first half of 2012, as the number of deals rose 52% over 2011 levels, according to The Jordan, Edmiston Group, Inc. (JEGI) (, the leading independent investment banking firm specializing in M&A across these markets. Announced transaction value increased 49% to nearly $32 billion, primarily due to a few multi-billion dollar transactions, with the balance of market activity centered around mid-size transactions.

Overall, acquirers have been focusing on smaller, complementary acquisitions, with nearly 95% of transactions in 1H 2012 at values of less than $100 million. Only five deals exceeded $1 billion in value, including Alibaba Group’s pending acquisition of 20% of its shares from Yahoo for $7.1 billion, and the $3.3 billion buy-out of TransUnion by Advent International and Goldman Sachs.

The majority of the deal activity in the first half of 2012 took place across the interactive, marketing services and technology markets. B2B and B2C Online Media & Technology, Marketing & Interactive Services, and Mobile Media & Technology accounted for 79% of total deals and 75% of deal value for the period.

Marketing & Interactive Services

There are clashing forces in the marketplace. On the one hand, there is the uncertainty created by such factors as historically high unemployment rates and low consumer confidence, the Eurozone challenges in Greece, Spain and elsewhere, as well as poorly performing bellwether stocks and post-IPO hangover (e.g., Zynga, Facebook, etc.). At the same time, unprecedented waves of change and innovation are creating new opportunities in the market. The explosive growth of social media – the “Socialization of Everything” – is transforming whole industries, such as entertainment, news, e-commerce, and gaming. Large brands are quickly trying to adapt and are shifting dollars to interactive media and below the line marketing (i.e., customer-centric communications, typically with measurable results). As a result, Internet advertising spending for Q1 2012 set a new record at $8.4 billion, according to the Interactive Advertising Bureau (IAB). “More online consumers than ever are taking to the Internet to inform and navigate their daily lives – by desktop, tablet or smartphone,” said Randall Rothenberg, President and CEO, IAB. “Marketers and agencies are clearly – and wisely – investing dollars to reach digitally connected consumers.”

At the same time, mobile is exploding. Smartphone sales have surpassed PC sales, and, according to StatCounter, mobile traffic accounted for 10% of Internet traffic in May 2012 vs. less than 1% in December 2009. According to eMarketer, mobile ad spend will reach $10.8 billion in 2016, up from $2.6 billion in 2012 and representing a CAGR of 43%. There is a secular evolution at hand, and marketing dollars continue to rapidly follow consumers. Media consumption continues to shift to the Internet, and now to mobile, moving away from traditional media. On average, consumers are spending 26% of their media time online and 10% of their media time with mobile, according to Kleiner Perkins partner Mary Meeker’s annual overview of Internet trends. Digital ad spending has started to catch-up with time spent online, with 22% of ad dollars flowing to the web. However, the gap is still significant with mobile, as it captures only 1% of ad dollars. According to Meeker, closing the gap between share of time spent online/on mobile and share of advertising dollars spent online/on mobile represents a $20 billion annual advertising opportunity in the US and points to the continuing movement of ad dollars to digital media in the years ahead.

As a result, companies are investing in marketing services to better assist their customers and capture more revenue. Advertising agencies and marketing services companies are retooling their business models by investing in integrated and interactive marketing solutions, such as Experian’s acquisition of Conversen, a pioneer in developing interaction management technologies, enabling cross-channel conversations (JEGI represented Conversen in this deal). According to Doug Bacon, Director, Corporate Development, Experian, “We see Conversen as a bridge between our digital and traditional offerings. The concept of consistent messaging to the consumer, regardless of channel, is critical to marketing success. This acquisition becomes the glue that puts it all together and provides us with a platform to tie together our market leading products into a single point of entry for our clients.”

Large technology companies, such as IBM, Oracle, Adobe and others, are also aggressively investing in marketing technology solutions to help marketers create value from their data and provide customers with key business intelligence and analytics, to drive better customer experiences and enhance customer engagement. Oracle’s $300 million acquisition of Vitrue, which enables companies to manage their presence on social networks, clearly highlights this point. These trends have made Marketing & Interactive Services by far the most active sector for M&A, accounting for 40% of all transactions and 27% of total value in 1H 2012.

Areas of Focus for Marketing & Interactive Services M&A In the first half of 2012, the ad agency and digital agency sub-sectors were the most active within Marketing & Interactive Services, accounting for a combined 34% of deal volume and 26% of deal value.

Marketing technology and market research/consulting were the next most active sub-sectors, each accounting for 16% and 15%, respectively, of deal volume for the half year. Other active sub-sectors for M&A included data & analytics (17 deals), PR agency (12 deals), ad technology (13 deals), and monitoring & intelligence (11 deals).

Drivers of M&A Value The Marketing & Interactive Services sector saw only one $1+ billion transaction in the first half of 2012 – Microsoft’s acquisition of Yammer, a provider of social networking portals for enterprises, for $1.2 billion. However, there were two $500+ million deals and seven more with values of $200 million and higher. The marketing technology sub-sector accounted for 37% of Marketing & Interactive Services deal value, led by’s acquisition of Buddy Media, which helps companies manage content across social media platforms, for $745 million. Other marketing technology deals making the top 10 in 1H 2012 included the Intuit acquisition of Demandforce, a SaaS application that automates Internet marketing and communications, for $424 million and Oracle’s acquisition of Vitrue for $300 million.

Ad and digital agencies combined accounted for $2.2 billion of deal value in 1H 2012, led by WPP’s acquisition of digital agency AKQA from General Atlantic for $540 million. Market research and consulting was next, accounting for 12% of deal value, including the acquisition by Genstar Capital of eResearch Technology, a provider of health outcomes research services, for $377 million. The following chart shows the top 10 Marketing & Interactive Services deals by value in the first half of 2012:

- Microsoft buys Yammer for $1,200M (June 2012)
- buys Buddy Media for $745M (May 2012)
- WPP buys AKQA (General Atlantic) for $540M (June 2012)
- Intuit buys Demandforce for $424 (April 2012)
- Genstar Capital buys eResearch Technology for $377M (April 2012)
- SingTel (Temasek Holdings) buys Amobee for $321M (March 2012)
- Acosta buys Mosaic Sales Solutions for $300M (June 2012)
- Oracle buys Vitrue for $300M (May 2012)
- Vocus buys iContact for $219 (February 2012)
- KRG Capital Partners buys Ansira for $200M (March 2012)

The “New Normal” At the SIIA Strategic & Financial Investment Conference on June 21st in NYC, JEGI Co-Presidents, Tolman Geffs and Scott Peters, provided the opening keynote presentation for more than 200 M&A focused strategic executives and private equity investors. This insightful session described the confluence of global uncertainty with the forces of rapid technological change as the “New Normal”, leading to interesting business combinations via M&A activity. Examples include several deals highlighted above, including Experian/Conversen, Oracle/Vitrue and Media, as well as the Amazon acquisition of Kiva Systems, which makes robots used in shipping centers to simplify operations and reduce costs, and the acquisition by Facebook of Instagram, which provides Facebook users with a compelling experience for photo sharing, for $1 billion. Companies, possibly more than ever, are focusing on servicing their customers, and we expect to see more interesting combinations via M&A in the years to come. To view their complete presentation, click here:

M&A Highlights for 1H 2012

The b2b online media and technology sector saw a 21% rise in the number of M&A transactions announced in 1H 2012 vs. 1H 2011 and a 160% increase in deal value to $7.9 billion, led by the pending Alibaba Group/Yahoo deal. Other notable Q2 transactions included the IHS acquisition of Globalspec, b2b lead gen connecting industrial marketers with their target audiences in engineering, technical and industrial markets; the acquisition by LinkedIn of SlideShare, a professional content sharing platform, for $119 million; and Norwest Venture Partners’ acquisition of 49% of Manta, a web site for business listings serving the local market, for $44 million.

The b2c online media and technology sector was the second most active in the first half of 2012, with 133 transactions at a total value of $4.2 billion – very similar results to the first half of 2011. The largest deal of the half was the acquisition by Cerberus Capital Management of 53% of AT&T’s Advertising Solutions business, which comprises a combination of print and online yellow page listings, for $950 million in April. Other notable Q2 deals included Axel Springer’s acquisition of Totaljobs, online recruiting platform, from Reed Elsevier for $176 million; Ybrant Digital’s acquisition of online shopping comparison sites PriceGrabber, Classes USA and LowerMyBills from Experian for $175 million; and the acquisition by Cox Target Media of, an online source for savings, personalized deals and money-savings experts, for $100 million.

M&A activity for the business-to-business media sector continues to be relatively quiet, with only 14 deals in the first half of 2012, for a total value of $82 million. In Q2, Questex Media sold its b2b industrial and specialty publications to North Coast Media; and Bobit Business Media acquired b2b media assets for the trucking industry from Newport Business Media.

The consumer magazine sector has been uneventful in the first half of 2012, with 27 deals at a total value of $122 million, a sharp contrast to the first half of 2011, which saw several multi-hundred million dollar deals, including the acquisition by Hearst Corporation of Lagardère’s magazine portfolio for $651 million.

The database and information services sector picked up considerably in the first half of 2012, led by the PE buy-out of TransUnion in Q1; and two transactions in Q2 – Veritas Capital’s acquisition of Thomson Reuters’ Healthcare business, a provider of healthcare data and analytics, for $1.25 billion; and Piramal Healthcare’s acquisition of Decision Resources, a provider of healthcare data, research and consulting, from Providence Equity Partners for $635 million. Other notable Q2 deals included the R.R. Donnelley acquisition of Edgar Online, a distributor of financial data and public filings, for $67 million; and Markit’s acquisition of Data Explorers, a provider of global securities lending data.

The education information, technology and training sector saw a similar number of deals and value in the first half of 2012, compared to the first half of 2011. The most notable deal of Q2 was the acquisition by PLATO Learning of Archipelago Learning, a SaaS provider of supplemental education products, for $301 million. Pearson continued to be very acquisitive in the education sector, with two acquisitions in May – GlobalEnglish, which offers on-demand enterprise solutions for advancing Enterprise Fluency, for $90 million; and Certiport, provider of performance-based certification exams and practice test solutions. Other notable deals in Q2 included the John Wiley acquisition of textbook publisher Harlan Davidson; and the acquisition by Boathouse Capital and Renovus Capital Partners of Atomic Learning, which provides educators with professional development and training resources for introducing technology in the classroom.

The exhibitions and conferences sector saw a sharp increase in number of deals and value in the first half of 2012, compared to the first half of 2011. The 29 transactions announced at a total deal value of $437 million represented 164% and 165% respective increases over 1H 2011 levels. Two event services deals led the parade, with Maritz acquiring Experient, a provider of meeting and event services, from Riverside Partners and Veronis Suhler Stevenson in April (JEGI represented Experient in this deal); and Gen Cap America acquiring Nth Degree, a provider of event management and marketing services, from Frontenac Company in March. In Q2, global event companies continued making acquisitions of exhibitions in emerging markets, such as the Tarsus acquisition of Life Media, an organizer of Istanbul-based trade fairs and ITE’s acquisition of BeautexCo, an organizer of beauty events in the Ukraine.

Mobile media and technology was the third most active sector for M&A in 1H 2012, with 73 announced transactions at a total value of $2.8 billion, representing 66% and 109% increases, respectively, over 1H 2011. Several notable mobile-related transactions took place in Q2, including the Facebook acquisition of Instagram. Facebook completed five additional mobile deals in the quarter, with the acquisitions of, mobile facial recognition software and technology, for $60 million; Karma Science, a mobile gift-giving application, for $80 million; as well as Tagtile, Lightbox and Glancee. Other deals in the quarter included Gree International’s acquisition of Funzio, a mobile game developer, for $210 million; the Intuit acquisition of AisleBuyer, a mobile payment service that allows customers to purchase an item for home delivery by scanning a bar code from inside the store, for $90 million; and Conde Nast’s acquisition of ZipList, which enables users to find recipes online and assemble shopping lists to sync to iPhone and Android phones, for $14 million.

About JEGI

The Jordan, Edmiston Group, Inc. (JEGI) of New York, NY is the leading provider of independent investment banking services for the media, information, marketing services and technology sectors. Celebrating its 25th anniversary in 2012, JEGI has completed more than 500 high-profile M&A transactions for global corporations; middle-market and emerging companies; entrepreneurial and family owners; and private equity and venture capital firms. For more information, visit

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.