While the number of mergers and acquisitions in the B2B Media & Technology space dipped 5 percent to 88 in 2016, the value of those deals soared 427 percent to $32.6 billion, thanks to a few key blockbuster deals, according to the Jordan, Edmiston Group's 2016 M&A Report.
Microsoft’s $29 billion acquisition of LinkedIn skewed the overall value of the B2B & Technology category, but several other notable B2B deals included Informa’s $1.6 billion purchase of Penton as well as Light Reading, IG Group Holdings’ $40 million acquisition of DailyFX, a provider of news for the currency trading community, DN 2.0 buying Dealernews from UBM and the merger of Stagnito Business Information, Edgell Communications and Path to Purchase to create Ensemble IQ.
The Database and Information Services category saw a similar trend as the B2B Media space with the number of deals dropping slightly in 2016 (56 compared to 59 in 2015), while transaction deal value more than doubled to $41.7 billion, due to the $13.5 billion acquisition of IMS Health by Quintiles Transnational Holdings and the $6 billion merger of HIS and Markit. In the fourth quarter, Nielsen bought Gracenote, an entertainment data and technology company from Tribune Media for $560 million and three UCG properties (DecisionHealth, Argosy and CCMI) and BLR merged and sold to Leeds Equity Partners (a deal brokered by JEGI).
While events continue to be the biggest revenue producer in the B2B space (and it could be argued that the events properties were the key factor in a number of the deals in the B2B Media & Technology category), event-driven M&A trailed Media and Data & Information Services by a wide margin in 2016, with the number of deals dropping 23 percent and deal value falling 12 percent to $3.3 billion, according to JEGI. Deals included UBM buying Allworld Exhibitions Alliance, which operates tradeshows in the Middle East and China, for $485 million, Intel buying event services business VOKE for $160 million and Tarsus Group buying Connect Meetings, a US business travel and meetings organizer.
Looking to 2017, JEGI says,
“With a new administration taking office, there will be some unpredictability heading into 2017 as the US economy responds to new proposals and policies. However, given overall improving consumer confidence as well as the Republican Party’s control of the Executive and Legislative branches of government, we expect the financial markets to continue to react favorably. As MarketWatch recently stated, “The stock market prefers the idea of a clean sweep, with Republicans winning the House, the Senate and the White House. Investors might view a Democratic sweep as onerous, but see a Republican lock as good news for the economy and the stock market.”
In addition, consumer optimism has risen post-election. The Conference Board Consumer Confidence Index posted another significant gain in December, following a strong increase in November. The Index stands at 113.7 (1985=100), up from 109.4 in November, due to a sharp increase in Expectations (a sub-index that measures consumer sentiment toward the short-term economic situation), which hit a 13-year high of 105.5.
With robust equity and debt markets, and excess cash in the hands of both corporate and private equity buyers, we expect M&A activity to remain strong in 2017. According to The Financial Times, “Republican administrations have traditionally been more lenient about allowing mergers,” and dealmakers predict that a Trump presidency will be good for M&A in the US, particularly with a strong domestic economy and meaningful job creation.”