Merger and acquisition activity rose significantly in the fourth quarter among digital media companies, led by increased action in e-commerce companies, says the latest Deal Notes report from investment banker Petsky Prunier. The digital media segment also includes comparison shopping, social media, local search and classified sites as well as shopping portals.
Investors in that segment completed 54 deals in Q4 2008 with a value of about $2.0 billion compared to 50 deals worth $1.15 billion in the same period a year earlier. The dollar value of deals jumped 74% compared to Q4 a year ago while the total number of deals was up 8%. E-commerce was the most active digital media subsegment, with 17 transactions valued at $784 million.
The second-most active segment was interactive advertising, which includes interactive agencies, ad networks, digital video, mobile advertising, e-mail services, and search engine marketing and optimization companies, as well as affiliate networks, with 47 transactions worth $1.2 billion.
Total deals in all industries in 2009 were down nearly 8% to 201 from 219 a year earlier, and the value dipped slightly to $13.5 billion from $13.6 billion a year ago.
Private equity firms were significantly more active in Q4 deals than in previous quarters. They accounted for 20 deals worth $7.7 billion, up from six deals worth $836 million in Q3 and one transaction worth $126 million in the same period a year ago. Among the major deals that was Bain Capital`s $1.2 billion acquisition of Bellsystems 24, a Japan-based call center business.
Venture capitalists accounted for 100-nearly 50%-of the Q4 deals, Petsky Prunier says. The total value of the deals was $1.5 billion. Strategic buyers-companies that acquire assets to complement other parts of their businesses-accounted for 81 transactions, worth $4.2 billion.