London, August 8th 2022: Ciesco publishes their bi-annual industry report today, that reviews key levers in the media industry in the first half of this year. The report takes the pulse of the industry on a global scale and provides a POV on the direction of the sector.
Summary: 2022 continues to be a period of re-invention for many companies following the extraordinary events of 2020 and 2021.
The Covid-19 pandemic exposed weaknesses in business models across the globe in 2020 and responsible business leaders took the learnings from that year to re-imagine their businesses going forward embarking on business transformation programmes. This has driven strong activity in M&A in 2021 and we have seen that continue in the first half of 2022. We expect they will continue to transform to stay relevant in a "new world" which has witnessed a structural change in relationship between businesses and their customers. Digitisation, data and technology will be at the forefront of that evolution and M&A will continue to play a key part of the transformation strategy for many companies through the second half of 2022.
Top line insights:
- 2022 deal volume of 1,033 is 21% higher than 2021 (corresponding period). 2021 was itself a record 51% higher than 2020.
- 2022: the 1,033 deals recorded numer is 65% higher than the pre-Covid 2019.
- The USA and UK account for 56% of all deal activity within the sector. Combining this with France, Germany, Australia, Canada and Italy equals to 76% of the global deal activity.
- Digital Agency, Digital Media and MarTech were strong sub-sectors, accounting for 43% of all deal activity.
- The Six largest advertising holding networks made 14 acquisitions in total. Havas was the most active with 4 deals completed in the first half of 2022. Most of these were focused on strengthening the digital capabilities across the group.
- Private Equity backed deals we recorded globally, comprising both new platform investments and bolt-on acquisitions for existing portfolio companies, showed an increase of 15% in deal activity over the comparative period. PE buyers collectively maintained a high level of penetration accounting for 43% of deals in H1 2022 compared to 45% for the whole of 2021.
- Despite both unexpected economic and geopolitical challenges, our sector in M&A has remained very robust in the first six months of the year, and we anticipate and are optimistic that it will remain so across the second half of the year.
- The companies that showed resilience throughout the pandemic years were those that had been digital and tech savvy. Business leaders will want to continue to adapt their companies to the new world and drive business transformation across all parts of their organisation - marketing, sales, commerce, customer service and supply chain procurement. Data and technology will be key facilitators in helping these different disciplines adapt and operate in unison.
- Private Equity have continued to deploy their high-level of accumulated dry powder to lead the way in acquisitions throughout the first half of 2022 with a 43% share of all deals within the sector. This is more than double the share of deals that Private Equity had less than 4 years ago in 2018. This is driving competitive bids and higher valuations as investors compete for limited quality acquisition opportunities. The PE route has become an attractive exit/partial exit opportunity for business owners. Their primary focus within the sector will be on digital, media and technology with healthcare opportunities continuing to move swiftly up the ranks.
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