International deals drive 2015 marcoms takeover trends

New Research by specialist marcoms M&A firm Results International shows that the number of global marcoms deals completed in Q3 2015 rose by seven per cent from Q2 (264 deals in Jul-Sep compared to 246 in Apr-Jun). This has been driven largely by a jump in the number of cross-border deals.

image_14curzonstreetMore than a third (36 per cent) of global M&A in the sector was international in Q3, compared to around a quarter (26 per cent) during the previous three months. A large proportion of WPP’s acquisitions were cross-border, plus it maintained a minority stake in the $600m acquisition of Chime Communications (left) by Providence Private Equity.

WPP made 14 acquisitions in Q3 including targets in Brazil, India, Turkey and Belgium, and 29 investments in Q1-3 as a whole. But while WPP remains the busiest buyer in the sector the study also found that emerging buyers continue to appear in 2015.

Teneo Holdings, a US-headquartered consultancy firm backed by BC Partners, expanded into Europe with the acquisitions of UK-based Blue Rubicon and Stockwell Communications in Q3 2015. Stroer SE, a publicly-listed German out of home and online advertising company, made three deals in Q2. US-based search engine marketing company has also been busyy with a transaction every quarter since the start of the year.

Other notable cross-border transactions in Q3 included Indian IT services company Wipro Digital buying Danish website design and build agency Designit (for a reported $94m). Mindtree, another Indian IT company, bought UK e-commerce integrator Bluefin Solutions.

The lion’s share of Q3 deals still involved targets based in North America (38 per cent, down from 46 per cent in Q2) with the UK also down (12 per cent of deals during Q1-3 in total, compared to 15 pe rcent in Q1-3 2014). There was a notable increase in activity involving APAC businesses, rising from 16 per cent of deals in Q2 to 21 per cent in Q3 2015.

The value of deals in Q3 also jumped from the previous three months ($9.9bn compared to $2.6bn in Apr-Jun), largely due to a consortium of Asian investment companies acquiring China-based out of home advertising giant Focus Media Technology for around $6.3bn.

According to the research, integrated agencies usurped full-service digital during this past quarter as the most popular sector for acquirers (ten per cent of the total, against seven per cent in Q2). The integrated sector was also responsible for seven per cent of all global deals in the first nine months of 2015, compared to four per cent during Jan-Sep 2014.

Results International partner Julie Langley says: “The rise in cross-border activity has come about in large part due to brands requiring a global service from their agencies and pushing them to enhance their global footprint.

“The other key driver is the emergence of new players, such as IT services companies, Asian networks and private equity-backed acquirers.”

You May Also Like

About Staff