Q3 deals up 32 per cent from same period in prior year
Total disclosed deal value $17.5 billion
Increase in cross border deals, accounting for 37 per cent
WPP the most active buyer with 12 acquisitions
Consultancies continue buying spree
Full service digital most active sector with 22 deals
Despite the Chinese stock market crash in the summer months, global M&A deal activity in the digital, media, marketing and technology sectors remain buoyant. Q3 deal activity in these sectors was up 32 per cent year-on-year. In the first three quarters of 2015, 790 deals have been announced, this is in line with the 793 for the same period in 2014, which was a record year for M&A in the sector. In Q3 248 deals were announced with a total disclosed value of $17.5bn, up from 188 deals with a total disclosed value of $8.7bn in the same period in the previous year.
Full service digital and marketing technology were the two most active sectors in Q3 2015, with 22 deals and 18 deals respectively, followed jointly by mobile, data analytics, PR and digital media, each with 16. The most notable deal in the mobile sector was AOL’s $238m acquisition of mobile ad network, Millennial Media.
Q3 2015 witnessed a surge in public relations deals, with 16 acquisitions, a significant increase from the seven that were announced in Q3 2014. The most notable PR deals include the acquisitions of Blue Rubicon and Stockwell by US corporate advisory firm Teneo Holdings.
Activity in the data analytics space has been increasing with 16 deals this quarter. Healthcare marketing witnessed a resurgence of interest with seven announced deals, including WPP, Publicis, and Dentsu all acquiring targets in this space.
WPP was the most active acquirer, announcing 12 deals, four of which were PR firms. In Q3 there was continued evidence of the acquisition strategy of the consultancies in the sector with both EY and Accenture announcing deals. Accenture’s three acquisitions included Brazilian digital agency, AD.Dialeto, US creative design agency Chaotic Moon, and Pacific Link, one of Hong Kong’s largest independent groups of full service digital agencies.
Shenzhen Sea Star Technology, a Chinese electronics manufacturing company, emerged as the latest buyer from the East, acquiring three Chinese advertising agencies in Q3, totalling $102m.
Notably, Omnicom was the only large marketing communications holding network not to make an acquisition.
Private equity buyers were involved in 29 of the 248 deals announced in Q3. The most notable being the £374m ($577m), acquisition of Chime Communications, the London-listed sports-focused marketing services group, by US-based Providence Equity Partners (along with WPP) – valuing the equity plus debt at 25.4 X Chime’s 2014 reported operating profit.
The US remains by far the most active market, followed by the UK. China was the third most active country, showing that the recent scepticism around growth in the world’s second largest economy has not dampened M&A activity in the Asian markets.
There were 12 deals in Canada, including the acquisition of Montréal-based agency Sid Lee by Hakuhodo, the Japanese communications holding company.
With 790 deals announced in 2015 so far, Ciesco expects the strong activity to continue in Q4. 2014 was a record year for M&A transactions in the digital, media, marketing and technology sectors, with 1028 deals announced. This figure should be matched be matched in the full year 2015 when the Ciesco 2015 Global M&A Review is published early next year.
Ciesco is a boutique corporate finance advisory firm, specialising in the digital, media, marketing and technology sectors. For a copy of the Q3 2015 M&A report please contact email@example.com”