The year 2017 was yet another vibrant year for M&A in the TMT industry. Although the deal volume, 1,188 recorded deals, was only slightly higher than 2016 we've come as long way since 2013 when "only" 831 deals were recorded. The ever increasing appetite of the industry for everything Digital and Tech has spearheaded the market towards record breaking deal volume. The total deal value however has not grown as much as the deal volume, there's even a slight dip to be seen here of almost 17%.
The creation of fully integrated creative power houses
Some notable mega deals that happened last year were Disney’s plans to acquire 21st Century Fox for more than $68 billion. This deal, when approved, is a representative of the consolidation trend that we see in the market and Vivendi’s acquisition of Havas to further strengthen its differentiated offering as a creative power house with media, data and content being an integral part of their service.
Martech on the rise
Of the "smaller" deals the emphasis lies mostly in de Martech space and AdTech specifically with acquisitions being done by tech giants like Oracle, Salesforce and Adobe who are moving more aggressively into the digital advertising and marketing space. With Oracle’s acquisition of Moat for example being a good example of a tech company positioning themselves more and more as a one-stop-shop as the multinational computer technology corporation buys Moat for its digital ad tracking software. There is a significant interest in the Martech sector as whole, both from Private Equity and strategic buyers (including Chinese investors), seeking to invest in scalable technologies.
Consultancies investing heavily in the sector
Another trend is the consultancy companies continuing to make in-roads into the marketing service sector, with an emphasis on Strategy/Creative and Digital Transformation services. As Accenture’s acquisition of German digital agency SinnerSchrader shows very clearly.
The usual suspects become less usual
The total M&A activity by the more traditional large global networks has fallen three years in a row as other market entrants are acquiring actively, like the consultancy giants. Accenture Interactive was ranked the largest digital agency world-wide, in terms of digital revenues, followed by IBM iX and Deloitte Digital. The traditional holding networks are still strong players with Dentsu again on the very top, closely followed by WPP.
The evolving buyer landscape
Last year was definitely a year of change. And what was driving the change and subsequently, the deal volume? On the one hand the new entrants to the market and on the other hand the ever evolving buyer landscape. Especially the change in the buyer landscape has been significant. The global holding companies don’t dominate any longer, there's a large roll being played now by the consultancies, the tech businesses, and the Martech companies. Let's see what this year brings … maybe 2018 will be the year of Taming the Titans!?
Facts & Figures were taken from the Ciesco report "The 2017 Global M&A Review in the Technology-enabled Media and Marketing industry" as presented at the Global M&A Review event held in co-production with the Van Doorne TMT Team on 12 February 2018 at the offices of Van Doorne in Amsterdam.
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