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First-quarter marketing and interactive services M&A activity up 13%

The total value of marketing and interactive services mergers and acquisitions increased 13% year-over-year to $2 billion during the first quarter of 2011, according to a report by investment banking firm The Jordan, Edmiston Group, Inc.

Notable Q1 marketing and interactive services transactions included Salesforce.com’s acquisition of Radian6 for $326 million; Teradata’s acquisition of Aster Data Systems, a data and analytics platform, for $263 million; and Adobe’s acquisition of data management platform Demdex.

“We think there’s a lot of growth yet to come,” said Adam Gross, CMO of The Jordan, Edmiston Group, Inc. “There’s heavy investment still going on in interactive and we continue to see growth activity.”

However, mergers and acquisitions in the database and information services sector “quieted in Q1 2011,” said Gross, in the report. The sector saw 11 transactions for a total value of $384 million, compared to 19 transactions valued at $3.1 billion in Q1 2010. The report, which covers the media, information, marketing services and technology sectors, noted that total M&A activity reached $12 billion in Q1 2011, a 16% increase over Q1 2010.

Mobile media and technology, which has been among the fastest growing sectors in the past few years, slowed in Q1 2011, according to the report. The sector saw 23 deals at a total value of $469 million, a 15% and 37% decrease, respectively, compared with Q1 2010.

EBay’s acquisition of GSI Commerce was the highest valued acquisition of the quarter, totaling $2.4 billion.

The b-to-b online media and technology sector saw a 39% decrease in the number of M&As announced in Q1 2011 versus Q1 2010, but a more-than-sixfold increase in deal value to $2.8 billion, led by the GSI Commerce transaction.

The b-to-c online media and technology sector was the most active in Q1 2011, with 78 transactions at a total value of $3.4 billion. M&A transaction volume increased 30% over Q1 2010, while deal value nearly quadrupled.

The consumer magazine sector “came to life in Q1 2011,” Gross said in the report. The sector saw seven transactions at a total value of $1.4 billion.

“This year, we saw deals across the spectrum of mediums,” said Gross. “Activity was pretty strong across the board.”  

Gross predicted that smaller companies will be acquired in the coming quarters. “Normally, when a large deal happens, it trickles down and smaller companies are acquired as well,” he said. “Mid-market companies are typically acquired after big transactions.”  

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