The M&A Beat Newsletter covers all sub-sectors (Advertising & Marketing, Telecommunications, Publishing, Film, Recreation & Leisure, Broadcasting, Music, and Video Games) of the Media and Telecommunications Industry with the latest transaction statistics and pertinent industry trends, in order to keep you enlightened and help make knowledgeable decisions regarding the future of your business.
U.S. Media and Telecommunications Deals Get Off to Slow Start in Q1
Coming off a strong year in 2018, the U.S. Media and Telecommunications industry experienced a lagging start to the new year. In Q1 2019, deal volume reached a two year low with 155 transactions, representing a 10% decrease from Q4 2018 (172 deals) and a 36% decrease from Q1 2018 (244 deals). Similarly, deal value also reached a two year low at $6.7 billion, compared to $20.8 billion in Q4 2018 (-68%) and $37.6 billion in Q1 2018 (-82%)1.
Media and Telecommunications deal volume in Q1 2019 saw a total of 155 transactions. Total deal volume was lead by Internet and Information with 45 deals, followed by: Advertising & Marketing (40), Telecommunications (18), Publishing (14), Film (13), Recreation & Leisure (11), Broadcasting (8), Music (5), and Video Games (1)1.
U.S. Media and Telecommunications deal value in Q1 2019 resulted in a total of $6.7 billion in transactions. The noticeable drop in deal value can be credited to a lack of Megadeals (deals exceeding $5 billion) in the industry to start the year. The largest portion of deal value (48%) is represented by deals with announced value of $100 million or less. Deals valued between $101 million and $500 million account for 43% of total value, while deals valued between $500 million and $1 billion account for 9%1.
Coming off a strong year of momentum in 2018 where it reached a 2 year high in Q4 2018, Private Equity investment volumes in the industry stayed relatively strong hovering around 27%. From a value standpoint, Private Equity deals accounted for 37% of the total value of the quarter’s deals.
The main driver in the significant drop in deal value in Q1 2019 was the lack of Megadeals in the industry. Behind Disney’s acquisition of 21st Century Fox and AT&T’s acquisition of Time Warner, the road has been cleared for a new group of mega conglomerates to control this vertical and kickstart its growth throughout the remainder of 20191.
[i] PricewaterhouseCoopers. (2019). Technology, Media and Telecommunications quarterly deals insights: Q1 2019. Retrieved May 10, 2019, from https://www.pwc.com/us/en/industries/tmt/library/quarterly-deals-insights.html (last visited May 10, 2019).