Multichannel Deals Drive Q1 M&A Activity, Petsky Prunier Says

Share this article:

First-quarter merger-and-acquisition activity in direct marketing was strong, driven by large deals among multichannel marketers, according to investment banker Petsky Prunier LLC's Marketing Services & Technology and Multichannel Marketer Deal Notes for the quarter, released yesterday.

The industry posted 128 deals worth $9.1 billion in value, up 14 percent from last year. The number of transactions remained constant compared to the same period last year.

Relatively stable economic conditions contributed to the continued strength in mergers and acquisitions as well as several trends specific to this segment:

  • Strategic buyers are evaluating the technology platforms of companies in the marketing services segment as an indicator of differentiation.
  • New interactive channels such as mobile technology and lead generation networks are growing in stature.
  • As data continues to grow in importance as a driver of marketing campaigns, database management companies are hot targets for other service providers and new full-service marketing players.

At the segment level, catalog, e-commerce and other integrated marketing companies generated 26 deals worth $3.8 billion, skyrocketing 143 percent when compared to last year even though the number of transactions only increased by two. Growth in this segment was strong it offset relatively constant results in the marketing services and technology sectors.

Interactive marketers were the most active on the M&A front, with many involving private equity groups. Notable deals include Steamboat Ventures' $22.8 million investment in RazorGator, an online ticket agent; Sutter Hill Ventures' $12.4 million investment in Allbusiness.com, and Madrona Investment Group's $8.3 million investment in Bag Borrow or Steal, an online service that rents designer handbags. On the strategic side, Amazon acquired women's apparel and accessory marketer Shopbop.com while InterActiveCorp picked up Shoebuy.com.

Catalog transactions fell by approximately 43 percent. Talbot's $472 million acquisition of J. Jill accounted for a majority of the sector's volume.

The largest multichannel marketer deal of the quarter was the acquisition of Advantage Sales & Marketing LLC, a provider of outsourced sales, merchandising and marketing services for the consumer packaged goods industry, by J.W. Childs Associates and Merrill Lynch Global Private Equity.

Although the number of marketing service transactions increased by approximately 5 percent for a total of 68, aggregate transaction value fell approximately 17 percent to $3.2 billion.

Interactive advertising was the busiest segment. Notable transactions include DoubleClick's purchase of Falk eSolutions, ad pepper media's acquisition of Crystal Reference Systems and Technology Crossover Ventures' $48 million investment in Adknowledge.

M&A activity slowed within the production and mailing segments but transaction value grew by 65 percent. The large deals driving this were Apollo Management's $449 million buy of SourceCORP; R.R. Donnelley's $250 million acquisition of Office Tiger, and Vista Group Holding's purchase of The Outlook Group.

The marketing technology segment's aggregate value for the 17 transactions in the quarter fell by 16 percent to approximately $2 billion.

Payment processing was the most active segment, although activity in the analytics space also was strong. Significant deals for the latter include Unica's $28 million acquisition of Sane Solutions, WebSideStory's $57 million acquisition of Visual Sciences, Symphony Technology Group's acquisition of ImmediateFX and FTVentures' $31 million in Coremetrics.

Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Multichannel Marketing

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Multichannel Marketing

Pet World's Multichannel Marketing Is a Whole Other Animal

Pet World's Multichannel Marketing Is a Whole Other ...

The family owned pet store redesigns its website to bring the in-store experience online.

Complexity's What Marketers Got, Simplicity's What They Want

Complexity's What Marketers Got, Simplicity's What They Want

Customer insights managers want campaign management tools to remain easy to use, even as they up their games with multi-layered campaigns.

Wine.com Uncorks New Digital Marketing Opportunities

Wine.com Uncorks New Digital Marketing Opportunities

The online wine retailer's strategy incorporates different flavors and depths.