Content M&A Hit 7-year High in Second Quarter
Led by Thomson’s $17.1 billion acquisition of Reuters, content industry M&A hit $33.1 billion in the second quarter, according to Whitestone Communications’ quarterly “Who’s Buying Whom”. That’s the highest quarterly figure since the first quarter of 2000, which featured the $164 billion AOL – Time-Warner deal.
In addition to the Thomson-Reuters deal, the quarter was pumped up by the $7.75 billion sale of Thomson Learning to private equity firms Apax Partners and OMERS Capital Partners; and Google’s $3.1 billion acquisition of internet advertising engine DoubleClick.
Other large deals for the quarter included Primedia’s divestiture of its Enthusiast Magazine division to Source Interlink for a surprisingly high $1.2 billion, Informa Group’s $992 million acquisition of market research provider Datamonitor, CBS purchase of internet music suggestion engine Last.fm for $280 million and Experian’s $240 million acquisition of web analytics provider Hitwise.
While the dollar value of deals surged in the quarter, the number of transactions dropped from 144 to 134 as compared to the same quarter in 2006.
Whitestone Communications President Baran Rosen projects a slowdown in the deal pace during the second half of the year, due to market conditions and to allow the major strategic investors like Thomson and News Corp to absorb the deals they have recently completed.
The markets have been so active that it is likely that buyers need time to pause and digest what they have. Also, the end-of-July pullback in the stock market and tightening of credit may lead to a slower deal pace through the end of the year.
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