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Hampleton Partners Report Shows Resurgence in Digital Marketing M&A

Interest from strategic investors likely to continue to fuel consolidation over the next 12 months

ID: 1485809
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(businesspress24) - Interest from strategic investors likely to continue to fuel consolidation over the next 12 months

London, February 9th 2017: The latest market report from technology M&A advisory firm, Hampleton Partners, reveals a resurgence in Digital Marketing M&A activity in 2016 with strong but selective M&A interest from strategic investors likely to continue to fuel consolidation in the sector over the next 12 months.

The Digital Marketing M&A report, which covers the period between July 2014 and December 2016, shows deal values for the first half of 2016 equalled almost the total for 2015, with approximately $3.4 billion deals, making 2H 2016 the second-highest valued period in the last five years.

The resurgence has been driven by higher spending across a smaller number of larger investments with deal values edging up over the past 12 months. This, Hampleton believes, shows buyer sentiment may once again be on an upward trajectory with a slowdown in venture capital funding, particularly in advertising technology, forcing the market to consolidate.

Despite this, trailing revenue multiples have fallen consistently, with 2H 2016 down to 1.9x from 2.2x during the first six months of 2016 and from 2.4X during 2H 2015. In contrast, EBITDA multiples have risen to 13X from 11.7X in 1H2016, which is indicative of buyers still being prepared to pay for quality acquisitions even in a market where operating margins in target companies continue to be squeezed.

Top acquirers
Digital agencies and marketing services companies accounted for 64 per cent of the deal count on the trailing 30-month period, with a total of 1024 deals completed.

Dentsu Aegis Network was the top acquirer, buying 33 enterprises, its most recent acquisitions being marketing holding company, Findr Group LLC, programming advertising SAAS vendor Accordant Media and digital marketing services firm, WITH Collective Services.

Publicis Group came in second place, acquiring 11 entities with its most recent acquisitions being digital advertising services company MATCH Media, Monkees web marketing and development agency and Relevant24, specialising in digital advertising and content creation.

The other most active buyers included Gravity4, Accenture, J2Global, GroupM, WPP and Marlin Equity Partners.

Changing buyer groups
One of the most significant trends seen over the last 30 months has been the convergence between assets in the advertising and marketing sectors. Also, the rise of Chinese investors as a more powerful force, matching the purchasing power of their Western counterparts in digital marketing M&A and completing two of the most valuable deals in 2016.

A group of new entrants looking to buy in the sector is now competing with the traditional agency groups such as WPP, Publicis and Dentsu battling for the billions in ad dollars shifting online. Among the key drivers of the industry''s widening buyer landscape is the continued uptake of big data analytics and programmatic technology, as a host of acquirers seek the new opportunities it creates across a myriad of industries and regions.

New entrants include management consultants such as Deloitte and PwC extending their consulting and delivery services; telecoms businesses such as Verizon and Telenor acquiring digital marketing assets in a bid to monitise customer data whilst cash-rich enterprise software firms such as IBM, Oracle and Salesforce are acquiring to complement their SaaS and cloud offerings.

Miro Parizek, Hampleton principal partner, says: “Digital Marketing M&A has been on a roller coaster ride in recent years, falling from dizzying highs to staggering lows. Cooling public market sentiment due to plummeting stock values in 2015 led to a drop off in initial public offerings and even greater caution in the private market. It has been an uneasy ride for an industry continuing to change day by day and struggling to come to grips with the rise in ad-blocking software and fraudulent internet traffic.“

About the research
The 8th bi-annual “Hampleton Partners M&A Research Report, 2H 2016” covers the period from July 2014 – December 2016, using data from 451 research. Hampleton’s research reports cover the following industries: Automotive Technology, Digital Marketing, e-Commerce, Enterprise Software, Internet of Things, IT Services and Outsourcing, SaaS and Cloud Services and Fintech.

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published by: RealWire
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Date: 02/09/2017 - 17:12
Language: English
News-ID 1485809
Character count: 4794
Firma: RealWire
Ansprechpartner: Leah Wood Feedback to about Pressrelease-id:
Stadt: Lincoln
Telefon: 1522883640

Meldungsart: bitte
Versandart: Veröffentlichung
Freigabedatum: 09/02/2017

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