Direct marketing M&A activity brisk: DM Days' panel

NEW YORK - Merger and acquisition activity is happening at a frenzied pace, according to a panel discussion called "Mergers and Acquisitions: Current Activity and Emerging Trends" here at DM Days on Thursday.

Speakers included leading M and A experts Claire Gruppo, co-founder of Gruppo, Levey & Co.; Michael Petsky, partner at Petsky Prunier; Tolman Geffs, managing director, Jordan Edmiston Group Inc. Moderating the panel was Robert J. Aiello, partner at Scura, Rise & Partners LLC.

"Within direct marketing and the M and A space, we are seeing a frenzied, sort of frothy market," Mr.Prunier said. "It's almost similar to the first real Internet phase we had, where anybody who had a business that seemed to have any profit or profitability seemed to be for sale. As such, there is a lot of product in the market."

On the buy side, Mr. Petsky said, "the large strategic firms need to have top line revenue to keep up with their overall position within the marketplace, and they are adding service offerings, a lot of it in interactive advertising."

Private-equity forms are also seeking larger transactions, Mr. Petsky said.

"There has been a lot of activity … but the question remains, over time, how many of the acquisitions made sense and how many will survive?" he said.

Ms. Gruppo added that the activity can't last for ever, but said it should remain strong until the 2008 presidential election.

"And then who knows?" she said. "Funny enough, elections really are sort of peculiar external events that affect all kinds of markets, but in particular a transaction market because it creates uncertainty and people hate uncertainty. So, usually activity slows down."

But, Ms. Gruppo said, "that doesn't mean it won't pick right back up again, depending on who is elected."

Overall, the underpinnings of the market are very good, Mr. Geffs said.

"There is, right now, a much broader group of buyers looking into various types of marketing and media companies, particularly interactive ones."

For example, he said, his company closed a deal this week involving Meredith Corp. acquiring Helia, a consumer health search engine, as part of its strategy to expand reach in the women's health market and to increase its online content.

"Basically a publishing company bought a search engine," he said. "We will see a lot more of that coming down the pike."