Investment bankers, private equity firms to keep eyes open at NAB Show
The 2011 NAB Show is less than two weeks away, and there appears to be a feeling of optimism in the industry, something that has been lacking in the past year or two. The economy is seemingly healthier, the financial performance of both broadcasters and technology vendors has improved and digital media is a hot topic across many industries as companies roll out plans to bring video and audio content to a growing number of platforms and devices.
The pre-NAB period is typically when expectations are set for the year, because both customers and vendors reveal their respective buying and selling plans. So far, there have been some interesting articles written about what customers are shopping for at the show, what new technologies are on display and, of course, the most important trends in the broadcast industry in 2011.
But, there’s another group of industry observers who also have an interesting view on the outlook for the broadcast industry: investment bankers and private equity firms. This year, there appears to be more interest than usual from these players.
So, what do investment bankers think about the broadcast industry and what are their objectives for the NAB show? In a word: deals.
Video and audio technologies have become strategic to many companies outside of the traditional broadcast business, so bankers will use the NAB Show as a way to find companies that might add value to a larger enterprise or a portfolio of companies.
Within the traditional broadcast industry, the improving economy has increased speculation about broadcast vendor mergers and acquisitions as well as consolidation.
Indeed, as shown in the graph, our most recent research of senior executives at broadcast technology vendors reveals that while about a third of companies intend to retain their private status, many others expect to be involved in some sort of strategic transaction within the next two to three years.
Recently, Covington Associates and Silverwood Partners, two investment banks that focus on the broadcast and digital media industries, published pre-NAB teaser documents for their clients and prospects. Both are worth reading, regardless of whether you are a vendor, broadcaster or independent industry observer. They provide a perspective that is sometimes missing when people discuss the broadcast business.
At the end of the day, the broadcast industry is a business. So, when you head off to the NAB Show, make sure you understand what both the technology and financial players are thinking.
Click here to read the full article and access the strategic analysis of the broadcast industry.