Report: DM Industry Deal Value Increased 47% in 2003
The investment bank, which provides merger and acquisition advisory services, released its "Direct Marketing and Marketing Services & Technology Deal Notes" yesterday.
Total estimated deal value rose 47 percent in 2003, though the number of transactions fell 23 percent.
Last year 56 transactions involved private equity groups split evenly between later-stage buyout and early-stage venture capital. Venture capitalists invested $331 million as buyout groups invested $1.3 billion in the DM industry in 2003. Notable private equity investments included ZelnickMedia's buyout of Lillian Vernon; Quadrangle Group's buyout of GoodTimes Entertainment and Roark Capital's buyout of Money Mailer.
In the marketing services sector, companies were involved in 158 transactions with a total aggregate value estimated at $6 billion. The average deal size was $74 million, with the median deal size around $10 million.
Interactive advertising, including search deals, led marketing services with 29 deals. It was followed by call center with 22 deals, e-mail and DM agency, each with 18 deals, interactive agency with 13 and data marketing totaling 10 deals.
Led by Yahoo's $1.5 billion acquisition of Overture Services, interactive advertising had the largest total value at $1.9 billion. Also, 16 marketing services companies completed two or more deals in 2003. The most active included Google (four deals, $75 million in value), ValueClick (three deals; $61 million) and LaunchPoint (three deals; less than $10 million).
In marketing technology, companies were involved in 140 transactions with a total aggregate value estimated at $10.4 billion. The average deal size reached $38 million while the median deal size was less than $5 million.
Direct marketers were involved in 131 transactions with a total aggregate value estimated at $23.2 billion. The average deal size was $177 million as the median deal size reached $10 million.
Catalog deals led the marketer segment with 58 transactions. The DRTV segment had the largest total value at $7.9 billion. Also, 15 DMers completed two or more deals in 2003. The most active included InterActiveCorp (five deals, $4.9 billion in value), Henry Schein (four deals, $156 million) and eBay (three deals; $542 million). Other active buyers included Alloy, Broder Bros., NBTY, Matrix Group and Priceline.