2013 marked a six-year high for M&A activity in the media, information, marketing, and related technology sectors—not surprising considering it was a year that included the $21.9 billion merger of Publicis/Omnicom and the $2.5 billion acquisition of email marketing firm ExactTarget by Salesforce.com.
In fact, according to a yea-rend report from media and marketing-tech investment bank Jordan, Edmiston Group (JEGI), four of the top five multibillion-dollar M&A transactions in 2013 were in the marketing and interactive services sector. In addition to the blockbuster deal between Publicis and Omnicom and Salesforce.com’s acquisition of ExactTarget, sports marketing agency IMG Worldwide was acquired by Silver Lake/William Morris for $2.3 billion, and Harland Clarke Holdings snapped up shopper marketing agency Valassis Communications for roughly $1.9 billion.
The aggregate M&A deal volume—at 1,394 transactions in 2013—came to $88.6 billion. Of that, the marketing and interactive services space accounted for the majority of deal volume at 479 transactions worth $45.1 billion, an amount that includes the nearly $22 billion Publicis/Omnicom merger. Other noteworthy deals on the M&A list this year, though not in the top five, were Oracle’s $1.5 billion acquisition of Responsys, R.R. Donnelley & Sons’ $698 million acquisition of Consolidated Graphics, and Adobe’s acquisition of Neolane for $600 million.
Even with all that activity, JEGI Co-President Tolman Geffs says he wouldn’t call 2013 a “humongous year,” though it does represent a “steady upswing from the 2008 low.”
Geffs, who says JEGI is “bullish about the coming year,” predicts continued growth in 2014 for three main reasons.
“One, business and consumer confidence is cautiously rebounding, particularly in employment,” he says. “Two, innovations in technology, especially in mobile and retailer technology, is happening rapidly and companies need to acquire to stay relevant.”
The third driver, Geffs notes, is the “plethora” of private and venture-backed companies that are ready to be sold and ripe for the picking.
Marketing-tech was a major driver of growth in 2013, a trend set to carry on into 2014, especially in the retail technology space. “Retailers are increasingly digitizing not just their e-commerce, but the entire shopping experience, including in-store shopping,” Geffs says.
For example, back in June JEGI helped broker the sale of MyWebGrocer, an e-commerce software company that provides Web and digital marketing services for brick-and-mortar grocers. It currently works with half the grocery chains in the country.
Says Geffs: “That is the type of company you’re going to see more and more in demand.”