01 February 2016
WPP Finishes 2015 as Most Prolific Acquirer in Media, Marketing Industry
By Nathalie Tadena
WPP , the world’s largest ad holding company by revenue, finished 2015 as the most prolific acquirer in the media and marketing industry, according to data from corporate advisory firm Ciesco.
There were 1,105 deals in marketing technology, mobile, digital media, advertising, data and analytics and related sectors last year, a 7.5% increase from the prior year, according to Ciesco’s analysis. The total disclosed value of these deals was $60.7 billion, though the true value of these transactions is likely much higher since not all of the deals disclosed financial terms. In 2014, the total disclosed value of deals in the sector was $52.2 billion, excluding Facebook ’s massive acquisition of WhatsApp.
Ciesco’s report covered any M&A transaction that is “relevant and related to the media, marketing, digital and related technology sectors,” and excluded venture capital investments and IPOs. The largest transaction was Activision Blizzard’s $5.9 billion acquisition of King Digital Entertainment, followed by Verizon’s $4.4 billion acquisition of AOL. By sector, marketing technology was the most active for dealmaking in 2015, followed by mobile, Ciesco’s analysis found.
The sector’s M&A activity last year included a significant increase in digital media deals as well as a surge in deals in China, a continued push from consulting firms into the marketing space and the emergence of new buyers such as China’s LEO Group and funds like You & Mr Jones. Ciesco said it expects more “hybrid business models” in the market that provide agency services, technology and consultancy to clients.
WPP announced 40 deals in 2015, down from 52 in the prior year when it also ranked No. 1, Ciesco reported. WPP’s major transactions last year included GroupM’s acquisition of digital media buyer Essence.
Japan-based holding company Dentsu announced 26 deals last year, making it the second-most active acquirer. Following Dentsu’s acquisition of Aegis in 2012, the company has been aggressively expanding in markets outside of Japan. Dentsu’s dealmaking picked up in 2015 from 2014, when it announced 18 deals.
Ciesco said Publicis was the third-most active buyer by volume of deals, with 19 transactions in 2015, down from 23 a year earlier. Havas and Omnicom were also included in Ciesco’s list of top 10 active buyers with nine deals each. Ad holding companyInterpublic , which wasn’t on Ciesco’s top 10 active buyers list by number of deals, announced four deals last year.
Private-equity investors were involved in 98, or 9%, of the deals tracked by Ciesco, down from 12% a year earlier. The most active private-equity investor in the sector was Vista Equity Partners, which did seven deals last year, including the acquisition of a majority stake in ad tech firm Mediaocean.
The six biggest ad holding companies announced 107 deals in 2015, representing 10% of the deals in Ciesco’s report. Five ad holding companies placed among the 10 most active buyers based on number of deals. The other most prolific acquirers in Ciesco’s report included ad tech firm Gravity4, consulting firm Accenture , China-based manufacturer Leo Group, private-equity firm Vista Equity Partners and social media company Twitter .
WPP was also named as the most active acquirer in an analysis by new business consulting firm R3, which tallied 119 deals in the agency M&A space in 2015. R3’s analysis covered acquisitions made by an agency holding group and acquisitions of agencies by other players, but excluded media and nonagency technology deals.
View the article on The WSJ