May M&A activity up 181% from previous year, bolstered by $8.5 billion Microsoft-Skype deal

Mergers and acquisition (M&A) activity in the marketing, media, technology and services industries totaled $18.7 billion in May, according to a transactions report from Petsky Prunier, an investment bank.

May’s total M&A value was the highest in the past 12 months, up 131% compared with May 2010 and 16% compared with April, respectively.

“The month’s data reflects an elevated level of transaction activity that we’ve observed for six to seven months,” said John Prunier, partner at Petsky Prunier. “Marketing M&A remains robust. There’s nothing in the report to suggest it’s getting better or softening. This is just a continuation of a trend that’s been around for two quarters now.”

Microsoft Corp.’s acquisition of Skype for $8.5 billion, by far the month’s largest transaction, bolstered the period’s overall value, he added.

“The Skype acquisition is a milestone transaction and noteworthy in terms of who did the buying,” said Prunier. “Microsoft has not had a lot of conviction in M&A marketing since its completion of the aQuantive acquisition.” 

Microsoft bought aQuantive in 2007 for $6 billion.

The digital media and commerce sector saw 117 transactions in May worth a combined $12.1 billion, including the Skype deal, representing the most active and highest valued segment. Marketing software and technology transactions amounted to $4.2 billion last month. Petsky Prunier observed $1.1 billion in marketing technology M&A, $978.5 million in deals in the agency and consulting segment, and $238.5 million in M&A by digital advertising firms.

“There were positive elements to all the segments we cover,” said Prunier. “But observations in one month are not the basis for formulating trends.”

AllState’s purchase of Esurance and Answer Financial was the second-largest transaction last month, totaling $1 billion. Publicis Groupe’s acquisition of digital agency Rosetta was the third-largest transaction at $575 million. 

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