New York-based Peachtree Media Advisors has just released its annual report summarizing mergers, acquisitions and amounts of capital raised in the online media market last year. The report is available as a PDF download (2MB). In 2008 there were were 707 merger, acquisition and capital raise transactions in the online sector of media - which was 92 more transactions than 2007. The breakdown was 348 capital raise transactions and 359 acquisitions. Despite the increase in transactions however, the actual dollar value declined from 2007.]]>
In 2008 there was $16.9 billion in reported deal value, a decrease of 62% from the $44.4 billion in 2007. Peachtree attributes the drop to "a lower number of large scale strategic acquisitions in the online media sector." In other words, valuations took a dive.
In M&A transactions, most of them occurred in the consumer sector of online media - 329 transactions, representing 46.5% of the total transaction volume in 2008.
The 2008 reported M&A deal value by sector:
- Consumer - $6.2 billion (36.7%);
- Business - $4.8 billion (28.4%);
- Mobile - $592 million (3.5%);
- Enabling - $2.5 billion (14.6%); and
- Commerce - $2.8 billion (16.7%).
In terms of venture capital, in 2008 $3.5 billion flowed into all sectors of media according to Peachtree. This was a 22% increase over the $2.9 billion in capital raised in 2007 in this sector. Peachtree stated that the "Enabling" category had the largest increase in the amount of capital raised, up 124% with $892 million in 2008. The Mobile sector also saw big gains in investment capital, with $341 million in investment capital in 2008 - a whopping 488% increase over the $58 million raised by that sector in 2007.
The consumer category was the biggest, with 48% of capital raises.
The top five sectors in terms of volume of transactions (not reported deal value) for equity raises in 2008 were as follows:
- Video & Online Games - 59 capital raise transactions;
- Social Networking - 57 capital raise transactions;
- Web Applications/Enabling/IT - 47 capital raise transactions;
- Mobile - 35 capital raise transactions; and
- Blogging/User Generated - 27 capital raise transactions.
It'll be interesting of course to see how the M&A and investment sector pans out in 2009. There were 27 capital raises in 2008 in the Blogging/User Generated sector alone, and I can't imagine there being that many in 2009. Tell us your thoughts in the comments.
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