Interactive and marketing services deals dominate M&A activity

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Mergers and acquisitions in the interactive and marketing services sector totaled $5.74 billion in the first six months of 2011, an 81% increase compared with the same period in 2010, according to a report from investment bank Jordan, Edmiston Group, Inc. (JEGI).

One hundred and twenty nine interactive and marketing services transactions were announced during the period, and market research and consulting transactions led the way in deal value at $1.45 billion.

“Because of the Internet and social monitoring, there's a lot of activity and a lot of interesting companies in the consulting and research space,” said JEGI co-president Scott Peters. “It will continue to be active into the next quarter.” 

Digital agency transactions led in volume, with 22 deals occurring during the six-month period. Publicis Groupe's acquisition of Rosetta, a global interactive marketing services firm, for $575 million was the largest-value transaction in the space. 

During the six-month period, $806 million was spent on digital agencies.

“We believe investment in marketing and interactive services will accelerate over the course of the next year,” said Peters. “The old adage is ‘follow the growth.'”

Peters said he's witnessed an increase in investors investing in debt, which should continue to accelerate transactions. “Lenders are getting more comfortable with these business models, and investments in debt are occurring.”

Other marketing and interactive services sector transactions included ad agencies (valued at $827 million total), marketing technology companies ($669 million), ad networks ($644 million), data and analytics ($473 million), measuring and monitoring ($382 million), social media marketing ($250 million), search ($70 million), email ($55 million), and PR ($20 million).

M&A in interactive and marketing services accounted for 27% of all transactions during the period.

The value of all announced transactions in the media, information, marketing services and technology sectors totaled $23 billion during the period, a 15% increase compared with the same period last year.

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