This past week, Whitestone Communications released its 2006 M&A retrospective, reporting on the startling increases that have been seen in the market v. 2005 and the previous five years.
Tradeshow and trade magazine deal activity increased by 60% from 2005 to 2006 (or from 53 deals to 85 deals). Dollar value increased 50%, from $1.941 billion to $2.918 billion. According to the report, however, "In the largest trade magazine deal in at least 10 years, a group of these funds [private equity] paid $10.3 billion for VNU... Because of its unusually large size, Whitestone excludes the VNU transaction in its deal activity calculations." If this transaction was added to the totals, the numbers get gaudy. The increase in deal activity gets a little bump from the one additional deal (up to 62%). But the dollar value increase is significant: total deal value for 2006 jumps to $13.218 billion, for an increase over 2005 of 581%.
In the report, Matthew DeBlasio, an associate at Whitestone, envisions the folding of the newsletter industry into the e-media segment: "In fact, the name 'newsletter' as a business is going to gradually be fading to be replaced by something akin to 'electronic information service.'" He points out that the Specialized Information Publishers Assocation changed its name from the Newsletter Publisher's Association in 2006. (In the newsletter space, number of deals was flat—24 both in 2005 and in 2006—but dollar value increased from $89 million to $253 million, for an increase of 184%).
Another well-worn prediction is that PE activity will remain strong in 2007, and for the usual reasons: favorable financial conditions; and funds have large amounts of capital that they need to put to work. Whitestone also noted, though, that PE sees opportunity in taking over large, public companies, citing examples of VNU, Reader's Digest, and Thomas Nelson.
From min's b2b
© February 5, 2007 min's b2b
