Amy Laban (212) 842-7126 [email protected]
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60 Broad Street, 38th Floor New York, NY 10004 (212) 842-6020 Fax (212) 842-6039 www.petskyprunier.com [email protected] FOR IMMEDIATE RELEASE Contact: Amy LaBan (212) 842-7126 [email protected] 1H12 Marketing, Media, Technology and Service Industries Announced 1,481 Transactions Totaling $78.3 Billion; Social and Mobile Subsegments Accounted for 22 Percent of Activity and 10 Percent of Value Digital Media/Commerce was the Most Active Segment in 1H12 with 515 Transactions; Software & Information was the Highest Value Segment with $31.8 Billion in Deal Value June 29, 2012 (New York, NY) – During the first half of 2012, Petsky Prunier tracked 1,481 transactions for a total of $78.3 billion across seven broad segments: Digital Advertising, Agency/Consulting, Marketing Technology, Digital Media/Commerce, Software & Information, Out-of-Home & Specialty Media and Marketing Services. The Social and Mobile subsegments within the broader Agency/Consulting, Digital Advertising, Digital Media/Commerce and Marketing Technology segments together accounted for 22 percent of total activity and 10 percent of value. Digital Media/Commerce was the most active segment overall, with continued technology and market shifts driving ongoing demand for eCommerce and Social Media/Apps. In addition, growing adoption of cloud-based software resulted in Software & Information being the highest transaction value segment in the first half of the year. MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES Chart Title MARKETING, MEDIA, TECHNOLOGY AND SERVICESERVICE INDUSTRIESINDUSTRIES MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES M&A1H12 AND M&A INVESTMENT AND INVESTMENT ACTIVITY: ACTIVITY1Q11 - 2Q12 1H12 M&A AND INVESTMENT ACTIVITY ($ in Millions) ($($ inin Billions)Billions) ($ in Millions) Agency/ Consulting DOLLAR $6,861 VALUE Out-of-Home & Specialty Media Software & $47.9 $7,770 Information $31,873 $42.0 $42.1 $36.2 $30.6 Digital Media/ Commerce $13,556 Digital Marketing Advertising Marketing Services DEAL $3,341 Technology $1,477 VOLUME 787 825 796 709 772 $13,405 2Q11 3Q11 4Q11 1Q12 2Q12 M&A Activity Acquisitions accounted for 44 percent of total transactions in 1H12. Digital Media/Commerce remained the most active M&A segment in 1H12 with 184 transactions and $9.1 billion in deal value. M&A activity was dominated by eCommerce, Social Media/Apps and Niche Content, which accounted for 53 percent of the aggregate volume in the segment. Digital Media/Commerce transactions included: Facebook’s $1 billion acquisition of mobile social network and photo-sharing app Instagram WellPoint’s $800 million acquisition of 1-800 Contacts, one of the largest direct marketers of contact lenses International Game Technology’s $250 million acquisition of Double Down Interactive, which offers online social casino gaming Petsky Prunier’s 1H12 Summary of M&A and Investment Activity Page 1 The second most active M&A segment in 1H12 was Agency/Consulting with 144 transactions valued at $6.2 billion. Consolidation among digital marketing services firms continued, as providers sought to bolster their multichannel/multidevice digital capabilities. M&A activity among the Digital Agency subsegment increased 41 percent from 2H11, accounting for 38 percent of deal activity and 27 percent of deal value in the segment. Notable deals included: WPP’s reported $550 million acquisition of AKQA, the largest independent digital agency, at 2.0x revenue and 12.9x EBITDA Aegis Group’s $125 million acquisition of Roundarch, a digital agency founded in 2000 by WPP Group, Deloitte Consulting and BroadVision, at 1.8x revenue and 10.9x EBIT Content management and social engagement were also driving forces behind M&A activity in the Marketing Technology segment. The subsegments Content Management and Social Technology each accounted for 15 percent of the total 136 transactions, and five percent and 23 percent of the total value, respectively. Acquisitions in the segment included: Microsoft’s $1.2 billion acquisition of Yammer, an enterprise social network offering employee collaboration solutions Salesforce.com’s $689 million acquisition of Buddy Media, which offers a social media marketing platform, at 6.9x revenue Oracle’s acquisition of Buddy competitor Vitrue for $300 million, at 3.0x revenue iEnergizer’s $150 million acquisition of Aptara, which provides digital publishing and content management technology solutions that allow publishers to manage a diverse portfolio of content and digital channels Software & Information was the highest-value M&A segment in the first half of 2012 with 83 deals worth approximately $29.5 billion, including 10 valued at more than $1 billion. ERP Software was the most active subsegment in 1H12, accounting for 23 percent of M&A activity in the segment. Significant deals included: Toshiba’s $850 million acquisition of IBM’s Retail Store Solutions Business, at 0.7x revenue Amazon.com’s $775 million acquisition of Kiva Systems, which provides automation software for distribution centers that helps companies simplify operations and reduce costs while increasing strategic flexibility, at 7.8x revenue Digital Advertising activity was driven by the Mobile Marketing subsegment, reflecting the growing prevalence of tablet applications and improved social media access through mobile devices. Transactions in the segment included: Singapore Telecommunications’ $321 million acquisition of Amobee Media Systems, a provider of mobile advertising solutions, at 10.7x revenue PlayPhone’s $52 million acquisition of SocialHour, a mobile marketing firm specializing in social marketing and lead generation Investment Activity Investments totaling $11.2 billion accounted for 56 percent of overall volume and 14 percent of deal value in 1H12. Digital Media/Commerce was the most active and highest value segment for investment, with 331 deals announced worth $4.4 billion. eCommerce, Social Media/Apps and Mobile Content/Apps were the three most active subsegments in the first six months of the year, accounting for 68 percent of investments in the segment. Digital Media/Commerce investments included: General Atlantic’s $304 million investment in Axel Springer Digital Classifieds, at a reported $1 billion valuation Microsoft’s $300 million investment in NOOK, at a reported $1.7 billion valuation Rakuten’s $100 million investment in Pinterest, at a reported $1.5 billion valuation There were 221 announced investments worth approximately $2.6 billion in the Marketing Technology segment in the first half of the year. Social Technology was again the most active subsegment, with 46 investments worth approximately $340 million. Large Marketing Technology deals included: JPMorgan Chase’s $100 million investment in Conduit, which provides website owners and bloggers with a platform for building online communities, at a reported $1.3 billion valuation Petsky Prunier’s 1H12 Summary of M&A and Investment Activity Page 2 Meritech Capital Partners’ $70 million investment in Evernote, which provides an application that allows individuals to save their ideas, projects and experiences, at a reported $1 billion valuation August Capital Management’s $45 million investment in PubMatic, which provides premium publishers with a real- time media selling platform for managing revenue and brand strategy Buyer & Investor Activity 1H12 Most Active Strategic Buyers by Number of Transactions Number of Buyer Transactions Representative Targets WPP Group 15 AKQA, Converge Technologies, DTDigital, EffectiveUI, Frey G2, Grape, OOO Jvision Publicis Groupe 8 BBR Group, i&e, Indigo Consulting, King Harvest, Longtuo, Mediagong, Pixelpark Facebook 6 Face.com, GazeHawk, Glancee, Instagram, Karma, Lightbox Groupon 6 Adku, DITTO.ME, FeeFighters, HyperPublic, Kima Labs, Mertado, UpTake Networks Interpublic Group of Companies 5 FRUKT Communications, FUSE, Lakestar Media, Nicole Weber Communications Omnicom Group 5 Adam & Eve Group, Fleishman-Hillard Vanguard, Medical Collective Intelligence Chime Communications 4 iLUKA, McKenzie Clark, Rough Hill, StratAgile, Succinct Communications Havas 4 Creative Lynx, Ignition, Victors & Spoils, Snapworx Mobile IHS 4 Displaybank, GlobalSpec, IMS Research, XeDAR Twitter 4 Hotspots.io, Posterous, RestEngine, Summify Google 3 Meebo.com, Quickoffice, Retailigence, TxVia IBM 3 TeaLeaf Technology, Varicent Software, Worklight MDC Partners 3 dotbox, R.J. Palmer, TargetCast Salesforce.com 3 Brighter Option, Buddy Media, Stypi Strategic buyers accounted for 41 percent of all control deals and 68 percent of transaction value in 1H12, with 602 transactions worth approximately $53.3 billion. More than 50 percent of those transactions occurred within the Digital Media/Commerce and Agency/Consulting segments, while another 22 percent were announced within the Marketing Technology segment. The most active strategic buyers in 1H12 were WPP Group, Publicis Groupe, Facebook and Groupon with 15, eight, six and six announced transactions, respectively. Buyout firms announced 50 acquisitions totaling $13.7 billion in 1H12. The Software & Information segment accounted for 46 percent of total buyout value with 23 transactions reaching $11.5 billion in value. The Agency/Consulting segment was the second most active segment. Sizeable buyout transactions announced in 1H12 included: Veritas Capital’s $1.3 billion buyout of Thomson Reuters Healthcare Apax Partners’ $1 billion acquisition of Paradigm, a software company focused on the oil and natural gas industry Genstar Capital’s