M&A activity focusing on “bite-sized” media deals: survey

Corporate players are focused on new markets and technologies as mergers & acquisitions hit a 3-year high, says a report from tax consultant EY.
November 18, 2014

The mergers and acquisition activity among global media and entertainment companies has hit a 3-year high, and the appetite for additional deals is growing.

That’s the conclusion of survey results unveiled Monday by tax consultant EY.

The focus of the recent M&A activity, the survey found, are “bite-sized” deals as media players look to bolt on new players and corporate strategies.

The industry snapshot revealed the current deal pipeline is “expected to shift toward middle-market companies with the intent to improve margins, move into new geographies and access new content and technology.”

Recent M&A activity in the digital space includes a spending spree by SoftBank, which invested $250 million in Legendary Entertainment and bought VOD service DramaFever last month. Otter Media, a joint venture between The Chernin Group and AT&T, also recently used some of its $500-million purse to acquire Fullscreen, which in turn bought Rooster Teeth last week. European media conglomerate also recently took a controlling stake in beauty and fashion MCN StyleHaul earlier this month.

Lawyers will be happy over the EY survey results, as they portend more hostile takeovers, according to the media and entertainment executives.

“In this type of an environment, it is critical for companies to increase the number of potential deals in their pipelines to create strong momentum in their middle-market acquisition strategies,” Tom Connolly, global media and entertainment transaction advisory services leader at EY, said in a statement.

 From Playback Daily with files from Melita Kuburas

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