M&A Activity Reaches $46.3 Billion in 2005

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Direct marketing industry merger-and-acquisition activity produced 469 transactions last year, generating $46.3 billion in deal value, up 65 percent from 2004, investment banker Petsky Prunier LLC said yesterday.


The marketing services sector generated the most deals, at 233, with Internet-driven marketing service segments accounting for nearly half. Among the larger deals were IAC/Interactive Corp.'s $1.9 billion acquisition of Ask.com, formerly Ask Jeeves; Hellman & Friedman's buyout of DoubleClick for $1.1 billion; and Epsilon's $120 million acquisition of Bigfoot Interactive. The total deal value for marketing services was $15 billion.


Petsky defines the DM industry to be inclusive of three broad sectors: marketing services, marketing technology and multichannel marketing.


Marketing technology deals had a combined value of $13.2 billion while multichannel marketer deals reached $18 billion. The activity in the marketing technology sector was mainly from venture capitalists and had a median transaction size of less than $9 million.


The multichannel marketing sector had fewer than 100 transactions. But many were in the hundreds of millions of dollars, including Charming Shoppes' $265 million acquisition of Crosstown Traders, School Specialty's $272 million acquisition of Delta Education and BMG Direct's $400 million buyout of Columbia House.


Petsky predicts "similar -- if not accelerated -- activity" this year.


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