Mergers and acquisitions (M&A) among marketing services, media and related technology companies is set to gather pace in 2015 after what has been a buoyant 2014 for the industry.
A survey by advisement company AdMedia Partners revealed that there have been year-on-year increases across the board for M&A. There was a 10% rise in respondents who made acquisitions along with a 4% growth in both mergers and companies being acquired by a strategic buyer.
AdMedia polled more than 9,000 international executives, of which 81% believe M&A by strategic buyers will increase in 2015 and for financial buyers the figure was up from 49% last year to 55% in 2014.
Buyers should act now
At 82%, the figure for the number of respondents who would urge buyers to act now is at its highest value in 14 years. The story is similar for financial buyers with 65% saying they would recommend acting now.
There is a question mark over what is driving growth and Seth Alpert, managing director at AdMedia Partners, thinks it is because of the marketing industry’s need to buy up certain talent and products instead of developing them in-house.
“We are seeing a strong demand for integrated digital agencies with expertise in mobile, social and analytics and for related proprietary technology solutions,” he said.
Active strategic buyers
In 2014 a little under one in two respondents (49%) admitted to being approached by a strategic buyer, a figure that has fallen slightly on 2013’s 56%, while 38% have been approached by a financial investor and 35% have made one or more acquisitions.
That rate of acquisition is expected to continue in 2015 as 62% say they will be seeking an acquisition target. Conversely, there has been a year-on-year drop in those exploring a sale of their company from 46% in 2014 to 50% next year.
More evidence of 2015 being a strong year can be seen through the median expected growth rate of 18%, a figure that is now at a seven-year high. Meanwhile, 27% believe their business will grow at least 20% next year.
