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Big technology firms and consultants muscle in on adland’s bids and deals

It’s not just WPP, Publicis, Omnicom and Dentsu Aegis who have been busy acquiring marcoms businesses but also IBM Interactive Experience, Lake Capital, Accenture, McKinsey, Capital One, SingTel BlueFocus and Alibaba.

A report by the boutique M&A advisory firm Ciesco on the 2014 M&A activity in the technology enabled media and marketing sector highlights the increasing broad spread of buyers both by sector and geography.

Across the 1028 deals analysed the most active buyer was once again WPP with 52 deals. Other leading marcoms networks were also busy with Publicis making 23 acquisitions, Dentsu 18 and Omnicom 10. However one of the key findings in the Ciesco report was the proliferation of buyers beyond the ‘usual suspects.’

New market entrants came from sectors seeking to acquire targets in the marketing services segment, including companies from consulting (Accenture, below, Deloitte, McKinsey, Boston Consulting), technology (Google, Facebook and Yahoo), IT and software (IBM, Opera and ICF International), data services (Acxiom and Experian), telecoms (SingTel) and financial services (Mastercard and Capital One).

It is also noticeable that the trend of buyers from Asia moving westwards to make acquisitions outside of their home markets continued. Although there were no deals of the magnitude of Dentsu’s acquisition of Aegis, companies in China, South Korea, Singapore, Japan and India made significant overseas acquisitions. One example was BlueFocus’ acquisition of a majority stake in Vision7 in Canada for a reported $210m.

A further factor in the competition for businesses was an increase of 80 per cent in the number of transactions involving private equity bidders. This involved growth in number of deals – up to 126 (with the most active buyer being GTCR, a Chicago based firm, which acquired five businesses) and value with the largest deal being CVC Capital Partners’ acquisition of Advantage Sales & Marketing for US $4.3 bn.

This proliferation of buyers doesn’t look like a a one-off but one that set to continue, creating a competitive market for businesses seeking to sell.

The above trends and insights are taken from Ciesco’s review of the 2014 global M&A activity in the technology-enabled media and marketing sectors. The report has been co-published with Experian, the data services provider, and its specialist M&A analysts at MarketIQ, and provides an overview of deal activity, with statistical analysis of overall global deals by volumes and disclosed values, as well as by geographic region and sectors.

The report also provides insights and trend analysis of private equity related activity and an overview of the buyer landscape, along with the outlook for the sector.

A copy of the full report with all the findings, trends and insights is available from Afsor Miah, director at Ciesco Group.

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