Despite the credit crunch, M&A activity in the content space was slightly ahead of last year's record pace in Q1. That's according to the Q1 M&A recap from the Jordan Edmiston Group.
JEGI recorded 202 deals worth $13.4 billion in the quarter, nearly 5% higher than the $12.8 billion value of the 207 deals in the first quarter of 2007.
The largest deals took place in the Database Information Services segment, where Reed Elsevier's (LDN: REL) $4 billion acquisition of Choicepoint and Hellman & Friedman's $2 billion acqusition of Getty Images led the way.
AOL's (NYSE:TWX) $850 million acquisition of social network Bebo helped drive 77% growth in the online segment.
There were drop-offs in a few segments which had been hot in 2007, including b2b magazines, consumer magazines and newspapers. That's little surprise as many of the big names traded hands last year and the major acquirers are busy absorbing their recent acquisitions, or, in the case of newspapers, licking their wounds.
Despite the tumultuous markets, I see continued strength in mid-market M&A for the rest of the year. Strategic buyers, particularly those in the UK and Europe which can leverage strong currencies, will continue to buy businesses at what they perceive to be bargain-basement prices.
Hi Barry, I've been reading your blog for the last several months and wanted to tell you that I think it's one of the most intriguing ones out there. Particularly the "Content Companies That Matter" series. In the face of the "techcentricity" of most blogs, I'm glad that you are thinking critically about whether "Content is (still) King" in the digital age.
Regarding this post, I wanted to chime in and get your thoughts on how well most of these major media companies have done with their tech-oriented acquisitions. The record, in my mind, is mixed. For example, Nielsen has done a masterful job of integrating BuzzMetrics into their operations, whereas Conde Nast seems to be very tentative in integrating Reddit.
It suggests two questions in my mind: (1) What kinds of tech acquisitions are truly synergistic for content companies? and (2) How can these content companies overcome the "innovator's dilemma" of embracing their tech acquisition's business models, which often involve free content in lieu of subscriptions. Curious whether you had a viewpoint?
Posted by: Samidh Chakrabarti | April 03, 2008 at 01:36 AM