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In association with
31st January 2017
22016 Global M&A
Review
Deal volume
• Record year for M&A activity, reflecting a dynamic and robust sector• 1,175 recorded deals, with buyers from 43 different countries acquiring companies
across 50 different countries
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Review
Deal value
*
* AT&T’s acquisition of Time Warner, Microsoft’s acquisition of LinkedIn, and 21st Century Fox’s acquisition of Sky Plc has been excluded from the aggregate disclosed value for 2016 to limit comparative distortion.
• Large acquisitions surged: with three mega-deals at +$10bn, and another 22 deals valued $1bn to $10bn, totalled 25 deals in the sector
• 36% overall value increase• Three mega deals announced in 2016, with a combined value of $127bn (not included
in charts above)
42016 Global M&A
Review
Monthly M&A Activity
• Q1’s high-deal count meant the first half of 2016 was stronger: 635 vs 540.• Consistent trend in the majority of deals being completed in Q1 and Q2 • Q3 recorded the highest transaction value at $26bn, with lowest in Q4 at $13.4bn
52016 Global M&A
Review
Notable deals over $1bn
Bidder Target Target descriptionDeal value (as reported)
EV/Revenue EV/ EBITDA
Media and entertainment conglomerate $85,400m 3.7x 13.9x
Social networking website for professionals and businesses $26,200m 8.5x 95x
Cable broadcasting and satellite company based in the UK $14,571m 2.1x 12.9x
Cloud-based ERP (Enterprise Resource Planning) provider $9,191m 11.7x n.a.
Digital media company with advertising, content, search and mobile capabilities $4,841m 0.97x n.a.
Enterprise cloud commerce solutions $2,800m 11.5x n.a.
Marketing automation software provider $1,790m 7.1x n.a.
Travel comparison website $1,743m 11.9x 81.3x
Performance marketing agency specialising in data and CRM $1,500m* 3.4x n.a.
Mobile marketing platform $1,400m n.a. n.a.
62016 Global M&A
Review
Notable deals under $1bn
Bidder Target Target descriptionDeal value (as reported)
EV/Revenue EV/ EBITDA
Adtech platform $900m n.a. n.a.
DMP (Data Management Platform) $700m n.a. n.a.
Video advertising enablement SaaS provider $540m 2.5x n.a.
Performance marketing providers for consumer brands $242m 6.6x n.a.
Video focused adtech platform $96m n.a. n.a.
Mobile marketing agency $78m 2.4x 7.3x
Online news portal with apps and webpages $56m n.a. n.a.
Digital marketing and creative agency n.a. n.a. n.a.
One of the UK’s largest independent creative agencies n.a. n.a. n.a.
Creative advertising agency in the Netherlands n.a. n.a. n.a.
72016 Global M&A
Review
Top 10 Active BuyersCompany 2016 2015 2014
36 26 1833 40 5214 - -10 19 2310 7 19 3 -8 4 98 3 87 7 27 1 1
• Top 10 accounted for 12% of overall deal volume (142 deals) • M&A focus on enhancing service offering and strengthening market share• Representative of the evolving buyer landscape
Telecommunications
Networks
Private Equity
Social MediaTechnology
IT Services
Emerging Buyers
Ad Tech & Mar Tech
Consultancies
Mid-market Groups
Asian Buyers
Media & Publishers
Buyer Landscape
92016 Global M&A
Review
Holding networks’ activity
18
52
23
9 105
26
40
19
49 9
3633
10 84 4
2014 2015 2016
• Dentsu acceleration over the last three years has now see them overtake WPP as the most active acquirer in the sector
• Publicis, Omnicom & Havas number of deals were down year-on-year• Holding networks’ share of total M&A activity falls to 8% (vs. 9% in 2015 and 10% in
2014)
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Review
Technology Buyers
• Focused on strengthening in digital marketing, machine-learning & data analytics • Salesforce in particular were aggressive, with 9 deals
BUYER ACQUISITION/TARGET
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Review
Consultancy Buyers
=
• Capability gap narrowing – allowing consultancies to compete with large networks and other technology firms to provide a full service Customer Experience
• Moving from “behind the scenes” to “customer-facing” digital expertise• Accenture Interactive now the largest digital agency worldwide (AdAge 2016)
BUYER ACQUISITION/TARGET
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Review
Emerging Buyers
• Newly formed groups and/or new funds - seeking to build a new generation of business models aimed at disrupting the sector and gaining market share
• Emerging market entrants from other sectors / emerging markets• Interest in high growth areas (Marketing Tech, Data & Analytics, Mobile)
BUYER ACQUISITION/TARGET
132016 Global M&A
Review
Private Equity
9%91%
10%90%
Private Equity Strategic
2015
2016
Deal volume by private equity vs strategicDeal volumes and values by PEs
• Financial investors increasingly bullish on the sector, with increases in both deal volume (+20%) and deal value (+42%)
• 118 recorded deals, with buyers from 18 different countries acquiring companies across 24 different geographies
• High level of take-private M&A
142016 Global M&A
Review
Geographic Overview
• USA continues to dominate, and deal number in line with 2015. Canada likewise• Western Europe deals up 13% from 2015 to 178 deals• APAC strong once again (driven by a 15% increase in China) with 197 deals being
completed in 2016, over 172 in 2015
UK
2016: 1882015: 149
Africa
2016: 102015: 11
APAC
2016: 197 2015: 172
Eastern Europe
2016: 212015: 26
Western Europe
2016: 1782015: 157
Middle East
2016: 192015: 12
LatAm
2016: 152015: 27
USA
2016: 514 2015: 516
Canada
2016: 332015: 35
15 2016 Global M&A Review
Geographic overview
• 44% of acquisitions were of US-based companies
• APAC at 17% of total – China dominates• Share of Western European acquisitions
was up slightly to 15% in 2016• UK up with 188 total deals, from 149
previously
2016
USA 44%
APAC 17%
UK 16%
Western Europe 15%
Canada 3%Middle East 2%
Eastern Europe 2% LatAm 1%
Africa; 1%
162016 Global M&A
Review
Rise of China
2015 2016
64 64
420
Domestic
6823% YoY
84
• Total deals by Chinese buyers up 23% to 84 deals• Outbound activity 24% of all activity - mainly in US (9) and UK (3) • Chinese market maturing – opening more opportunity for tech-enabled and
media/marketing companies• China buyers now adept at cross-border transactions and raising capital in foreign
markets
Outbound Chinese Acquisitions
172016 Global M&A
Review
Sectors
0
20
40
60
80
100
120
2015 2016
Deal
Vol
ume
• Marketing Technology – most active sector (~ approx. 9% of overall deal volume), 12% down y-o-y
• Mobile – deal volumes also down, 2nd most popular• Across the remaining sectors, deal volumes are distributed more evenly
182016 Global M&A
Review
Marketing Technology
• Retained no. 1 position • Attractive to a range of buyers (PE firms, telecom and media companies, Asian
acquirers, enterprise software companies, etc.)• Focus on technology platforms that can help identify new levels of consumer
behaviour insights and user engagement & experience
102deals
$8bndisclosed value
192016 Global M&A
Review
Mobile
• Bouyant sector – hardware, software & availability of rich media helping drive this.• 60% of Google’s global revenue in 2017 will come from Mobile. +46% vs 2015• Apps dominating with Apple’s App Store generating record $28.5bn in 2016. China App store sales have grown 90% from 2015
$2.8bndisclosed value
90deals
@
202016 Global M&A
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Data and Analytics
• Fourth most active sector with 16% growth from 2015• Increasing need for Brands to capture data and insights into consumer behaviour.
Adspend budgets increasingly rising in this category• Access to real time audience data is increasing among marketers budgets• Companies with cutting edge products in data management, data analytics for content
marketing – and artificial intelligence capabilities are creating high value activity
72deals
$4.1bndisclosed value
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For a copy of the full 46 page report, including detailed analysis on:
Deal statistics, volumes, values Notable deals Buyer landscape
– Holding companies– Mid-market groups– Technology– Consultancies– Emerging buyers
Private equity activity Geographic overview Cross-border activity Sectors Ciesco’s outlook
Please contact [email protected]