Results International: private equity leads as buyers snap up content production companies

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New research from Results International shows a significant increase in M&A deal activity involving content production companies, more than doubling from 35 acquisitions globally in 2018 to 82 in 2019.

In the last weeks of 2019 alone, Blackstone invested £100m for a minority stake in content development house HH Global and Tech Mahindra acquired retail content production agency BORN Group for $95m.

M&A and fundraising specialist Results found 1,410 marketing sector deals in total in 2019, a nine per cent increase from the previous year, of which 557 were in martech/adtech. 2019 saw the number of martech/adtech deals jump by 37 per cent over 2018.

The most active sector within marketing services was advertising and creative agencies with 430 deals. Within advertising and creative, full-service agencies was the number one sub-sector.

The second most active sector for the year was marketing and sales technology with 227 deals, with marketing automation and customer data platforms (CDPs) the most active sub-sector at 135 deals.

Results partner Julie Langley says: “Identity resolution was a major area of focus in 2019, which led to an increased focus on CDPs and other companies that have the ability to unify disparate data sources to create a single customer view. This led to increased M&A and investments, conducted by both financial and strategic buyers.

“The growing interest in content companies matches the blisteringly fast growth in formats, devices and communications needs seen by brands worldwide in recent years. Advertisers need to think big but hit small on an always-on basis. Companies that have the ability to produce a wide range of personalised content at scale on multiple devices, and in different markets are highly sought after.”

The research also found that private equity continues to invest in the marketing industry. Private equity accounted for roughly a quarter (24 per cent) of 338 deals.

60 per cent of the private equity deals in volume last year were within marketing services. Performance marketing firms have been particularly attractive. A number of UK independent firms received investments from PE. Brainlabs received a minority investment from Livingbridge in March; Jellyfish and Croud received investment from French diversified private investment arm Fimalac and LDC respectively in November.

Traditional holding companies reduced their deal activity to focus on internal restructuring and acquiring tech-enablers rather than technologies themselves. Only Dentsu made the top buyers list with 12 acquisitions in 2019 – way below the 34 deals it made in 2018. Of the eleven most active buyers last year, five were private equity.

2019 also saw some intriguing new buyers as in-housing continues: household-name brands looking to take back control of their data to personalise customer experience further. McDonald’s acquired Apprente and Dynamic Yield, Nike acquired Celect, a leading retail predictive analytics company, while Walmart bought Polymorph, Aspectiva and assets of Triad Retail Media. Paypal made its largest deal to date, acquiring Honey for $4bn to expand its customer journey optimisation resources.

North America remained the most active target region in 2019 with 672 deals but the region which saw the most growth was the Middle East with a 123 per cent increase. Of the 29 deals in that region, 27 were Israeli businesses, mostly in the martech/adtech sector.

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