2018 M&A: Dentsu and WPP lead, consultancies slow down but outdoor has biggest deals

According to new research from M&A and funding adviser Results International there were 237 M&A deals completed in the marcoms industry in Q3 2018, marking the most active quarter since Q4 2016.

Dentsu and WPP were again the two most active buyers, both completing five deals in Q3. So WPP is still acquiring despite its recent shift in focus to internal restructuring, as seen in the merger of VML and Y&R and the divestment of minority holdings such as AppNexus.

In contrast management consultancies slowed down in Q2 and acquisitions all but ceased in Q3, with Accenture making just one buy although Deloitte also acquired Magnetic Media, an AI marketing solutions business.

Results International partner Julie Langley says: “Although S4C’s acquisition of MediaMonks got a lot of the headlines this quarter, it was far from the only deal of note. IPG’s acquisition of Axciom Marketing Solutions (AMS) for $2.3bn, IPG’s largest deal in years, confirms IPG’s willingness to move forward as a standalone company.

“Salesforce’s acquisition of Datorama for an estimated $800m highlights where the marketing cloud-based platforms are heading, which is providing brands with the ability to analyse their data more quickly across all channels and take near real-time decisions on how best to engage consumers.”

Full service digital was the most active subsector in Q3 with 31 deals. This quarter saw an increase in the amount of vertical specialist agencies acquired. The number of healthcare agencies acquired this quarter moved from 19th place last quarter to ninth place in Q3 with 12 transactions. Among these Huntsworth plc acquired two healthcare agencies, Navience Healthcare Solutions for $24m, with a two-year deferred consideration of $40m and Giant Creative Strategy, a large independent healthcare agency, for $72.2 million.

There were also five acquisitions in sports marketing in Q3, matching the total number in H1 2018. Listed gaming agency Keywords Studio has become a more active buyer within the marcoms, buying two gaming marketing agencies in Q2 and three in Q3.

Langley says: “The growing interest in specialist agencies in areas like healthcare and gaming allows traditional acquirers and consultancies to fill the gaps in their portfolios, but also provides incentive for new buyers to get involved, such as gaming companies. There’s a new breed of hybrid specialist agency that combines deep vertical market insight with technology expertise, and they’re very attractive prospects.”

The third quarter of the year also saw 21 deals in UX and design and build and 20 deals in media. The latter subsector included major out of home deals: US-based Boston Omaha buying two out-of-home marketing agencies based in the USA, Watt Outdoor for $82m and Key Outdoor for $38m, plus the UK’s Global Radio acquiring Outdoor Plus from Inflexion and Primesight from GMT Communications. Global announced an even bigger deal today, buying Transport for London (TfL) contractor Exterion Media (below). Global has spent around £700m on its swoop into outdoor.

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