Media M&A Market Smoldering Hot in Q1

Click to enlarge Merger and acquisitions activity, which began to rebound in 2004 and exploded in 2005, is so far soaring high in 2006, with the number of deals and deal value having increased in the first quarter compared with 1Q05. Across the 11 industry sectors tracked by the Jordan, Edmiston Group, Inc. (JEGI), media and information industry M&A volume in 1Q06 numbered 168 deals, up nearly 8 percent from the year-ago quarter; deal value surpassed $14.6 billion, a 35 percent increase over the first quarter of 2005, according tothe M&A firm. The increase in M&A activity was led by the following key sectors: online media (number of deals up 54 percent); consumer books (number of deals up 100 percent; value up over $1 billion); consumer magazines (deal volume up 27 percent); database information services (volume up 13 percent; value up nearly six-fold); exhibitions and conferences (volume, 27 percent; value, 70 percent); marketing and interactive services (volume up 31 percent; value up 29 percent); and newspaper publishing (value up 188 percent). Click to enlarge According to JEGI (pdf file), the key drivers of growth in media M&A are "major strategic companies, with strong balance sheets, pursuing growth through acquisitions; private equity firms that still have large investable cash positions; bank financing that is available to acquirers at attractive lending multiples; a strong U.S. economy, with a promising outlook; strong continuing growth in the online media and interactive marketing sectors."