Global marcoms deals rose in 2016 with Dentsu and WPP lead acquirers
The number of marketing communications mergers and acquisitions continued to rise during 2016, led by Dentsu overall with content creation businesses very much in demand.
Credit: Results International
According to annual research released by Results International, 1,023 marcoms deals took place globally, up from the 979 deals that were completed during 2015.
The first quarter of the year was the busiest in activity with 287 deals being agreed. In the UK, 39 deals took place during the final quarter of the year, which Results says reflects a continued confidence in Britain despite the Brexit vote of June, taking up 15 per cent of the deals done globally during that period. This included the surprise acquisition by Accenture of Karmarama as the management consultancies continued to strengthen their offering.
Dentsu was the most acquisitive of the networks during 2016 with 43 buys, ahead of WPP which had 34. The Marketing Group placed third with 16 while Publicis and IPG reported 11 and 10 respectively.
Private equity houses such as Providence Equity Partners which had three deals, and KKR, Court Square Capital Partners/Leonard Green & Partners and CVC Capital Partners which each cemented two deals, continued to raise their game when it came to the marcoms sector.
Julie Langley, partner at Results International, said of the report: “Deal volumes for the year have looked very strong, with the marcoms sector attracting interest from a very wide range of new and traditional buyers alike. A total of 202 different buyers made one or more acquisitions during the year. The ever-widening range and complexity of activities undertaken by Marcoms businesses is a significant driver in this. The slight dip in Q4 is probably due to usual market fluctuations, with no sign of slowdowns in the US or UK markets despite continuing economic uncertainty.
“Although full-service digital remains the most popular target, it’s no surprise to see content nipping at its heels. It ties in with every other part of marcoms and conversations about content are now being driven at the highest boardroom levels.
“Early indications are that 2017 will be another strong year that could easily surpass 2016. We are working on a record number of deals at present with strong buyer interest from all the major consultancy firms and emerging buyers from Asia and the US as well as the traditional buyers, so we are looking forward to seeing what 2017 has in store.”
Full-serve digital continued to be the most active subsector for marcoms deals in 2016, ending the year with 25 deals in Q4. Integrated and public relations also proved to be popular subsectors with each racking up 77 deals in 2016. Content also enjoyed growth throughout 2016 – there were nine content deals transactions in Q1, 12 in Q2, 13 in Q3 and 16 in Q4.
North America led the space in 2016 with 424 marcoms deals while Western Europe came in second with 197. The APAC region followed with 181 while the UK reported 154 marcoms deals last year. Out of all of the deals that took place last year, 297 were cross border.
Results International also recently reported that a total of 412 M&A deals took place last year in the martech and adtech space, reaching a combined value of $24.18bn. However, the number of ad tech deals fell from 155 in 2015 to 121 in 2016 whereas martech deal volume rose from 256 to 291.