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Media M&A Pace Remained Sluggish in 2Q

CHARLOTTESVILLE, VA.: Mergers and acquisitions in the media sector remain slow, SNL Kagan numbers indicate. During the second quarter this year, 254 deals were announced, down 27 percent from 2Q08, when the tally reached 350. The transaction value in 2Q09 was $552 million--averaging around $2.17 million per--versus $3.24 billion--$9.26 million per--the year earlier. During the first quarter of this year, 286 M&As with an aggregate transaction value of $1.49 billion were done, averaging $5.2 million per deal.

Scott Peters, a managing director at the New York M&A advisory firm Jordan Edmiston Group Inc., said there were no “blockbuster” transactions in 2Q because, among other things, of tight credit markets.

“I think thematically, the same things hold true as in Q1, where the deals tend to be smaller. They’re not big [leveraged buy-out] deals,” he told Kagan. “Transactions are more heavily weighted to strategic buyers than the private equity groups.”

Transactions of Internet-based deals dominated within the media segment, particularly those involved in behavioral targeting. The biggest 2Q deal was the absorption of Hearst-Argyle by privately held Hearst Corp., which took the remaining 18 percent interest in the TV division it didn’t already own for $186.1 million. An announced deal between Ticketmaster and Live Nation valued at $633.7 million has not yet closed, and Kagan said regulatory hurdles may be a problem.

Among all sectors tracked by SNL, comprising financial, real estate, energy and media, 2Q deals were down 31 percent in number and 66 percent in value compared to 2Q08. At the same time, May was the most active month for U.S. stock issuance in 10 years, Kagan said.
-- Deborah D. McAdams