The Jordan, Edmiston Group, Inc. (JEGI) investment bank released their report of 2012 M&A deals in media, information, marketing, and technology sectors last week. Overall, the number of deals and the total value of deals were way up — a 50% increase in the number of deals and a 43% increase in total value over 2011.
A few highlights worth calling attention to:
The sector with the largest number of deals and the highest total value — by a large margin — was Marketing Services & Technology. There were 485 deals in that category with a total value of $20.5 billion, up 67% and 36%, respectively, over 2011. This sector accounted for 9 of the 30 largest deals of the year.
Two deals in that sector that I believe are particularly important bellwethers for the marketing technology space were Oracle’s acquisition of Eloqua for $871 million and ExactTarget’s acquisition of Pardot for approximately $95 million. Consolidation in the marketing automation category is heating up — but I remain convinced that this will ultimately feed more overall diversification around a more standardized set of core platform providers.
Interestingly, 90% of the transactions covered by this report were smaller deals, less than $50 million in value. This is consistent with an environment where the costs of creating and deploying high-quality web-based software have dropped dramatically over the past 7 years. For many ventures, it’s not necessarily a “go billion, or go home” environment. It is now easier than ever for entrepreneurs with a great idea to launch and grow with a minimal amount of capital. I believe this is one of the key forces that will continue to drive the ongoing diversification of marketing technology in the years ahead.
Global agency holding companies (Dentsu, WPP, Publicis) and large technology companies (Microsoft, Oracle, Salesforce.com) were naturally the most active buyers, but so were many companies from the marketing services world: Gannett, Rakuten, Sapient, INFOR, Advisory Board, and UBM. More strategic players are looking to have a role in this new age of the ever-more-powerful, technology-driven marketing department.
Looking forward to seeing some incredible growth in 2013!