Dealmaking in media and advertising has shown some activity but remains far from a full resurgence. Initial deals throughout the year have created some optimism, though they don’t signify a definitive turnaround. The recent increase in term sheets feels more like a preview than a substantial recovery in mergers and acquisitions within the sector.
A few notable deals have been made, including Outbrain acquiring Teads, Publicis buying Influential, and Informa acquiring Ascential. Other significant transactions include Hyve Group’s acquisition of the Possible conference and MiQ’s purchase of Pathlabs.
June saw additional deals, such as Seedtag acquiring Beachfront Media and Madhive buying Frequence. While these transactions indicate some movement, they don’t necessarily reflect a broader trend.
Many of these deals have been in the works for some time and are not clear indicators of current market conditions. However, they suggest potential future activity, as mergers and acquisitions rarely happen in isolation. These developments hint at gradual shifts that may lead to more significant changes in the market.
The start of the year saw investment banks preparing companies for sale, but a surge in deals has not materialized due to uncertainties like potential interest rate changes and the upcoming U.S. presidential election. Nevertheless, capital is ready to be deployed when conditions improve. The U.S. is expected to lead this charge, with the U.K. and other markets following.
Some companies are already positioning themselves for future deals. First Party Capital has several companies in the sales process, with expectations for closures by year-end. U.K. agency group Common Interest and SAMY Alliance are also planning acquisitions. These deals, while not groundbreaking, indicate trends of public companies seeking growth, private equity investors ready to invest, and private firms preparing for exits.
Valuations are expected to be more realistic, with less inflation than seen in recent years. From 2021 to 2022, deal values dropped significantly, continuing into the next year. However, there has been a recovery since early this year, with increased deal values and a year-over-year rise.
This shift is attributed to higher interest rates, a focus on profitability, and lessons from past periods. Outbrain’s $1 billion acquisition of Teads reflects a more measured approach to valuations, suggesting confidence in strategic acquisitions while maintaining financial prudence.
