Private equity is active in the sector, comprising roughly one-third of deal volume and providing attractive exit opportunities for sellers of traditional marketing services firms. Digital acquisitions continue to be sought after by full-service technology and media players. This activity is a vote in favor of the economic rebound. In the first half of this year, venture capitalists invested $11.4 billion to fund 1,646 deals (in all marketing services categories)—a 49% jump in value and a 23% increase in deal volume from the first half of 2009, according to PricewaterhouseCoopers.
While the number of deals within the marketing services space has returned to 2007 levels, the average dollar amount has not. The recent data for the first half of 2010, disclosed an average deal size of $112 million compared with the same period 2007 of $368 million. One of the most active M&A players has been agency holding company MDC Partners. Last month MDC acquired a majority interest in New York-based experiential marketing company Relevent. That deal followed on the heels of MDC's acquisitions of experiential marketing company TEAM and public relations companies Sloane & Co. and Allison & Partners The mega-holding companies have been less active.
Eric Kercheval & Associates is currently involved in two buyer-representation and two seller-representation projects. Three of these projects are expected to close by the end of the year. If making an acquisition or contemplating a sale is on your 2011 calendar, contact us yet this year for a pre-sale or acquisition planning meeting.
