2007 deal volume surpassed that of 2006, despite economic and credit market uncertainties. A total of 1,168 deals were completed in 2007, a 16% increase from 1,008 in the prior year. Three E&M sectors--Publishing, Internet Software & Services and Advertising and Marketing--drove deal volume, accounting for 78% of total volume. Digital convergence and the growing importance of the Internet and online media led E&M companies to strengthen their digital platforms, triggering much of the deal activity.
Private equity firms solidified their presence in E&M, completing 159 deals in 2007, up from 148 in 2006. Average private equity deal size tripled from $245 million in 2006 to $897 million in 2007, indicating these investors were doing larger transactions.
Looking ahead to 2008, convergence remains a key factor influencing deal activity in E&M, and consumer empowerment over how content is consumed will continue to drive E&M companies to build scale, enhance capabilities and think outside of the box. Strategic buyers are likely to play a bigger role than their private equity counterparts, as they do not typically relay as heavily on the debt markets for financing. That said, do not count private equity buyers out. These investors will remain a major player in the E&A arena. Heightened interest from foreign acquirers is likely with the dollar at an all time low. To find out more, download a copy of the report.
