Mergers and acquisitions activity in direct marketing generated a record number of transactions in 2004, according to Petsky Prunier LLC, New York, a DM and advertising investment banking firm.
Reported in the firm's “Deal Notes Annual Review” yesterday were 550 transactions among direct marketing, marketing service and marketing technology companies, generating an estimated $27.2 billion in transaction volume.
Marketing service sector transactions (including companies providing interactive advertising, database, agency, list, call center and fulfillment services) accounted for 42 percent of all direct marketing industry deals with 228.
Median deal prices rose industry-wide compared with 2003, facilitated by heavy interest from private equity and venture capital firms and a favorable lending environment.
“A combination of trends is fueling the recent growth in direct marketing M&A activity,” said Michael Petsky, CEO of Petsky Prunier. “From a big-picture standpoint, an improving economy, capital market stability and renewed CEO confidence to seek outside growth have provided a strong foundation for the current transaction environment. Additionally, accelerating industry dynamics, such as consolidation among marketing technology companies, a squeeze on midsized marketing service providers and the growing need to build multichannel sales outlets, are forcing both financial buyers and strategic players alike to bid feverishly for choice targets.”
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters
