Q1 Sees $11B in Marketing Mergers, Petsky Report Says

A 44 percent spike in dollar volume highlights Petsky Prunier's first-quarter deal report, as direct marketing, marketing services and marketing technology companies announced 120 transactions in the quarter worth nearly $11 billion.

Though the number of deals rose 6 percent, dollar volume climbed 44 percent compared with Q1 2003. Nearly all of the increase was attributed to the marketing services sector, with the printer and interactive advertising subsegments generating most of the activity.

Petsky Prunier, New York, is an investment bank that advises on marketing industry-related mergers and acquisitions.

R.R. Donnelley's merger with Moore Wallace contributed $3.7 billion to the quarter's transaction volume in marketing services.

Interactive advertising also continued to generate activity, accounting for nine deals versus 10 a year ago. Yahoo acquired Kelkoo, a European comparison-shopping and lead-referral service, for $575 million, while Ask Jeeves acquired Interactive Search Holdings for $343 million. Also, FindWhat.com bought Espotting Media for $170 million and Comet Systems for $33.5 million.

Direct marketers participated in 30 deals worth about $3.6 billion. This accounted for 25 percent of the industry's deal volume and 34 percent of deal value. The average deal size was $121 million. Catalog deals led the segment with 17 transactions amounting to $2.9 billion. Deals included Clayton, Dubilier & Rice's buyout of VWR International from Merck for $1.7 billion as well as ZelnickMedia's acquisition of Time Life from Time Warner.

Marketing services companies were involved in 43 transactions with a value estimated at $6.4 billion, accounting for 36 percent of deal volume and 59 percent of deal volume, respectively.

Marketing technology firms participated in 47 deals worth about $828 million, generating 39 percent of deal volume and 8 percent of value.

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