News From You

followthemedia.com - a knowledge base for media professionals

ftm News From You

News From You

We receive dozens of news tips and press releases each week from ftm contributors. We want MORE. And we want to share the raw information as quickly as possible. NEWS FROM YOU is the forum for adding what you know to what we know. Share what you know...or what your hear. We will apply the light-touch of the editors axe for clarity. We will also accept NEWS FROM YOU in English, French, German, Spanish, Italian, Dutch and Portuguese...without translation. (We do insist on being able to understand what you contribute.) You also must clearly indicate that your contribution is for publication in NEWS FROM YOU.

Please note: we cannot use PDF files, only text and .doc files.

Send us NEWS FROM YOU

Week ending April 30, 2011

Grant Thornton - Surge in UK media M&A in Q1 2011 - April 27, 2011
from Helena Holm/Grant Thornton

The UK media market saw a healthy start to the year as M&A activity surged in the first quarter, according to leading financial and business advisors Grant Thornton UK LLP.

The firm’s M&A tracker reveals that the number of announced deals across the media sector in Q1 doubled compared to the same time last year - from 35 in Q1 2010 to 67 in the first quarter of 2011. Total deal values (disclosed) also shot up, reaching £3.5bn this quarter, compared to the £235m the sector mustered up in Q1 2010.

Bouncing back from a quiet end of last year, the Advertising & Marketing sector saw the most activity with 32 deals announced during the quarter. Traditionally a smaller-size deals segment, transactions in this sub-market still only totalled a fairly modest disclosed £45m.

The Publishing sub-sector also had a strong first quarter. While the number of deals in this segment stayed stable on the previous quarter at 24, total values in this space were up five-fold from £157m in Q4 2010 to £800m this quarter.

Dominic Bolton, Media Corporate Finance Partner at Grant Thornton, said: “M&A activity has truly made a return to the media sector, with total cross-sector values up on both the previous quarter and the same time last year. We are not back to the heady days of 2007, but the figures are tremendously encouraging, particularly compared to 2010 when activity rebounded strongly from the lows we saw in 2009 and have been steadily increasing quarter by quarter throughout the year.

“Even excluding the EMI debt for equity swap (£2.2bn) and the newly announced familial tie up between Shine and News Corp (£415m), values were close to five times more than the Q1 2010 equivalent.

“Disclosed activity, both in volume and value this quarter, was driven by Advertising & Marketing and Publishing companies.

“There is a particularly strong appetite to do deals in the Advertising & Marketing space, which saw a flurry of activity this quarter after a fairly quiet quarter in Q4 2010. This could partly be explained by the fact that we have seen a desire by some groups to expand their social media and digital skillset, and others, their geographical footprint. The usual suspects, such as WPP, have been actively acquiring foreign entities.

“More ‘traditional’ advertising houses such as M&C Saatchi and Publicist have also been on the acquisitions trail, looking to increase their portfolio by acquiring smaller creatives. This follows on from the steadily increasing appetite we have seen for digital agency bolt-ons over the last few quarters.

“The upswing in publishing deal activity demonstrates the continuing consolidation in B2C magazines (Hearst’s announced acquisition of the international magazine arm of Lagardere) and greater activity in B2B information and face to face marketing. At one end of the spectrum we are witnessing - at last - the tidying up of the more print based portfolios in the likes of RBI and UBM with their sale of Computer Weekly and the Publican portfolio respectively. Meanwhile, Pearson has been particularly acquisitive with its foray into vocational and academia services – their offer for EDI has been recommended – and expansion into India and global tutoring, with an increase in its stake in TutorVista to 76%.

“The themes driving this higher level of activity in media are consolidation in traditional print media and the continuing search for content, technology platforms and new markets”, Bolton concluded.