M&A market review for new media

Posted on October 3, 2010

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the IBM acquisition of netezza for $1.7Billion definately makes one pay attention. its a big play into datawarehousing and plugs straiht into the growing data trends – i.e. that more data is being generated today then has ever been before.

walt disney and google have both been highly active during the period. kleiner perkins funding of shopkick is interesting – an app to drove instore visits.

from paid content

M&A activity in the marketing, information and digital media/commerce areas rose 27 percent Q3, but fell compared to the second quarter of this year, says media investment bank Petsky Prunier, which tracked 200 deals for this survey. The sequential drop-off in M&A was not too surprising, as deals have a certain seasonality and dealmakers tend to take things a little bit slower in August. As a sign that dealmaking has come back this year, prices were up 41 percent to $10.7 billion compared to Q309, primarily due to several larger transactions during the quarter.

Among the biggest deals in Q3 were IBM’s $1.7 billion acquisition of Netezza, which was the highest was the Marketing Technology segment, which happened to also be the most active area for M&A. Mobile Technology was the most active sub-segment within Marketing Technology with 10 deals, including four acquisitions and six investments worth $108 million. Transactions included Motorola’s acquisition of 280 North for $20 million, Walt Disney’s purchase of Tapulous and WebTrends’ acquisition of Transpond. Among investments, PocketGear raised $15 million from Trident Capital, Shopkick raised $15 million from Kleiner, Perkins, Caufield & Byers and Ngmoco raised $5 million from Google (NSDQ: GOOG) Ventures.

Digital Media/Commerce was the second most active segment. The 53 deals included 33 acquisitions and 20 investments valued at roughly $2.5 billion. Within that industry, e-commerce led the way with 19 transactions for $416 million.

In second place behind e-commerce in terms of activity was social media, with 13 transactions worth $231 million. Dividing the category further, there were 10 deals in the social games sub-segment for nearly $939 million.

On the Digital Media/Commerce end, there was Hellman & Friedman’s purchase of Internet Brands for $640 million, Walt Disney’s acquisition of Playdom for $563 million, Google’s acquisitions of Slide and Like.com for $228 million and $100 million, respectively; there was also OpenTable’s acquisition of TopTable.com for $55 million. Among investments, Etsy raised $20 million from Index Venture Partners, BuyWithMe raised $16 million from Bain Capital Ventures, Hi5 Networks raised $14 million from Crosslink Capital, Beyond the Rack raised $12 million from Highland Capital Partner.

Despite the continued economic volatility and the fears of a double-dip recession, it doesn’t seem that deals will be slowing down in the last quarter. If anything, volume will almost certainly hold steady, and even more likely continue to rise further as both buyers’ and sellers’ desires and demands match up more closely.

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