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Mergers and Acquisitions

Ad tech M&A deals amounted to $2.4bn in Q1


By Ronan Shields, Digital Editor

April 21, 2016 | 3 min read

Figures released today by specialist M&A advisor Results International reveal that the first quarter of 2016 was the joint third-highest for ad tech/martech deal activity on record, with such transactions amounting to $2.4bn during the period.

In total 108 deals were announced during this period, 75 in martech and 33 in ad tech, according to Results International’s report which also highlighted the activity of serial acquirers advertising agency network Dentsu Aegis, online retail giant Rakuten, plus enterprise software provider Oracle.

Six companies made two or more acquisitions, including serial acquirers Dentsu, and Rakuten, which regularly make multiple acquisitions each year. Once again consolidation by the software powerhouses was a significant driver for M&A, with Oracle’s rumoured $175m acquisition of Addthis continuing its ongoing push into marketing technology.

Results International’s report also goes on to note that WPP, which regularly tops the acquirer leader board, was notable by its inactivity during the period, having not announced any such acquisitions during the period. Having made 14 acquisitions in the marcoms space in Q1 this year WPP remains acquisitive and it will be interesting to track its M&A activity in Q2, according to the report.

Julie Langley, Partner at Results International, said: “Agencies, IT services companies, enterprise software vendors, telcos and media groups, and traditional data are all now competing for ownership of the ad tech/martech space. Not many sectors of the TMT ecosystem can afford to ignore the disruption that's taking place and most are jostling for position.

“It’s inevitable that we'll see more deals from these buyer groups in the future. Ad tech and martech companies that can demonstrate an innovative, differentiated offering, and that are continuing to scale quickly, will continue to be attractive to these types of acquirers and command a premium valuation.”

Private equity was active in 9 per cent of deals in Q1, in an increase on the 7 per cent of deals seen in 2015. Along with direct investments, private equity backed companies were particularly acquisitive in the quarter, with SSI (HGGC backed), Mediaocean (Vista backed) and Internet Brands (KKR backed) all acquiring. This increase in activity signals the attention the AdTech/MarTech sector is receiving from private equity as a consolidation play.

Private equity was also behind the largest acquisition in Q1; the $1.2bn paid for Opera, a mobile led AdTech platform, by a consortium of two leading Chinese Internet firms backed by the Golden Brick Silk Road fund. Other than the size of the deal, the acquisition is notable because it sees a significant investment into Europe by an Asian acquirer.

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