Mergers and Acquisitions (M&A) are an effective tool for the struggle for spheres of influence. With their help, market players not only eliminate competitors, but also combine assets for business development. But not all mergers and acquisitions are successful. Miscalculations and mistakes when taking into account soft (corporate culture, management style) and hard (acquisition costs, finances) factors can devalue the brand and even cause serious losses. Below we will look at the most successful M&A deals in the field of advertising and marketing in the domestic and international markets.
M&A deal between TransUnion and Neustar
At the end of 2021, it became known about the purchase of Neustar by TransUnion. The price of the M&A deal in advertising and marketing amounted to $3.1 billion. Neustar is a well–known company that develops advanced solutions in the field of marketing and communications.
With its products, customers can create connected consumer interfaces, combining solution analytics with real-time digital identification services managed by the OneID platform.
After the purchase, TransUnion shares increased in price by 37% within six months, reaching $124. At the beginning of February 2023, the company’s capitalization is $13.36 billion.
After signing the contract, TransUnion management managed to maintain an effective Neustar management model. Its success after the takeover is evidenced by the fact that it received the prestigious Juniper Research Future Digital Award for the best solution for protection against robotic calls for the second year in a row.
Purchase of Innovid TVSquared Platform
At the beginning of 2022, it became known about the conclusion of an M&A deal in the field of advertising and marketing between Innovid (connected TV advertising measurement platform) and TVSquared (analysis and attribution service for converged television).
The purchase was driven not only by Innovid’s desire to diversify the business. According to the CEO and co-founder of the company, Zvika Netter, the combination of independent global advertising display and cross-platform accounting opens up new prospects for the development of television measurement technology.
After signing a contract with TVSquared, Innovid was able to create a unified global solution. Now it offers customers an independent platform for multi-channel advertising delivery, creative personalization, measurements on television and in the digital universe.
The contract amount was only $160 million, but after its conclusion, Innovid got the opportunity to reach a new level in its niche.
Tremor bought the Amobee platform from SingTel
In July 2022, Singtel announced the sale of the Amobee subsidiary specializing in digital media and advertising in the United States to the London-based advertising technology firm Tremor International.
The former owner was prompted to conclude an M&A deal in the field of advertising and marketing by the desire to conduct a strategic reboot of the business.
Tremor International paid $239 million for Amobee. For the new owner, this purchase was a profitable investment. Note that before that Singtel bought Amobee in 2012 for $321 million. In addition, it suffered an operating loss of $70 million in 2022.
Despite the deterioration of Amobee’s performance for Tremor, the purchase was an important step towards the implementation of the development strategy.
The news of the takeover had a positive impact on market expectations. Immediately after that, the value of Tremor’s shares rose by 1% amid a 34% drop since the beginning of 2022.
At the time of the deal, Amobee was not considered a major player in the market, but its takeover helped Tremor scale. This became the main argument for the strategic justification of the transaction. According to Tremor CEO Ofer Drucker, the acquisition of Amobee has significantly improved the company’s technology offering across all growth drivers, including data, performance capabilities, tools and self-service DSP. Since the beginning of 2022, the capitalization of Tremor International has been declining to $ 220 million, but now this indicator has begun to grow again.
M&A deals in advertising and marketing: the purchase of SpotX by Magnite
In September 2021, Magnite, the largest independent advertising platform for sale, announced the conclusion of a final agreement to acquire SpotX from RTL Group for $1.17 billion. Of these, $560 million was paid in cash, and the remaining amount was paid in Magnite shares based on the price as of February 4, 2021. As consultants, the buyer attracted financial analysts from Goldman Sachs and LUMA Partners.
The purchase of SpotX made it possible to launch Magnite, the largest independent video advertising platform.
According to Magnite President and CEO Michael Barrett, the purchase of SpotX gave the opportunity to create an advertising-supported CTV. It has already started receiving budgets from linear television, and Magnite will have good opportunities to influence the industry in the future.
Mike Sheahan, co-founder and CEO of SpotX, praised the optimistic assessments of the prospects for the merger of the companies. According to him, after joining forces, Magnite will be able to offer a new global platform for video advertising, which has no analogues in the modern market. Financial confirmation of the realism of such forecasts will be available after a few years.
Purchase of the RealWeb advertising agency by QIWI
In 2022, the financial company Qiwi started implementing a plan to enter the Russian digital advertising market. The first step towards the goal was the purchase of the Realweb agency.
The price of the M&A deal in the field of advertising and marketing was not announced, but according to the co-owner of the acquired company Emin Avetisyan, the price was market. Under the terms of the deal, Qiwi received 78% of Realweb shares, and over the next six months – the remaining 22%.
For Qiwi, the acquisition of an advertising agency was another step towards business diversification. Prior to that, the company has already launched a Qiwi wallet, the Rowi platform, as well as a service for marketing automation Flocktory.
Realweb’s revenue for 2022 amounted to ₽24 billion, which is ₽2 billion less than in the previous reporting period. The amount of the contract was not disclosed, but before that Qiwi stated that it plans to acquire a new company for no more than 10% of the funds available to it.
Based on this statement, DigitalBudget analysts admit that the price of an M&A deal in the field of advertising and marketing ranges from ₽1 billion to ₽2.5 billion. Before the purchase, Realweb occupied about 8-10% of the Russian advertising market. Taking into account current indicators, the transaction can be considered one of the most successful in the marketing segment of the Russian Federation in 2022.
Purchase of Axciom Marketing Solutions by IPG Holding
The acquisition of Axciom Marketing Solutions by IPG Holding was the largest transaction in the segment by the end of 2018. The purchase was due to the strategic course of the new owner to ensure its own autonomy in the field of advertising. AMP’s own platform could not satisfy the request for an effective system for analyzing consumer preferences. To meet this need, shares of Axciom Marketing Solutions were purchased. The amount of the M&A deal in the field of advertising and marketing amounted to $2.3 billion.
The potential of the new division of the holding was used not only for internal needs, but also for the sale of cross-services (data analytics, CRM management).
The success of the decision to move in this direction is evidenced by the company’s revenue growth indicators ($10.9 billion or 7% for 2022).
After joining the IPG holding, Acxiom managed to strengthen its position in the market. In 2022, she was recognized as a leader in her segment in the Snowflake Modern Marketing Stack Report.
M&A deals in advertising and marketing: purchase of Dentsu Aegis Group
In 2012, the Japanese holding Dentsu acquired the British telecommunications holding Aegis Group plc. Conducting an M&A transaction in the field of advertising and marketing of such a scale made it possible for the new owner to enter the EU and Russian markets. The contract amount was $5 billion (£3.2 billion): Dentsu acquired Aegis Group shares at a price of $3.8 per paper.
The financial statements of the acquired holding testified to high rates of profit growth. For example, in 2011, the operating profit of Aegis Group amounted to £197.4 million (+30.6% compared to the previous reporting period).
Judging by the further actions of the management of the Japanese advertising holding, a soft takeover strategy was chosen. After the conclusion of the contract, the TOP management of Aegis Group retained their positions, and the brand itself continued to position itself in its usual format.
The purchase of shares of the British holding company took place at a price that was 48% higher than the value of the securities two weeks earlier.
These investments quickly paid for themselves, and had a positive impact on the level of capitalization. Immediately after the M&A deal in advertising and marketing, the value of Aegis Group shares on the London Stock Exchange increased by 46%.
The most successful M&A deals in advertising and marketing: let’s summarize
The most successful M&A deals in the field of advertising and marketing are concluded thanks to a skillful choice of integration strategy, a sober assessment of the level of synergy and compatibility of enterprises.
It should also be noted that success depended on the ability of the company’s management to soberly assess the risk factor and the ability to find a compromise between the interests of shareholders and customers.
In some cases, the success of a transaction cannot be measured by purely financial indicators, since the value of the assets of companies with unique technological solutions cannot be estimated in monetary terms.
The unpredictable dynamics of the development of the marketing and advertising market in the conditions of the economic crisis in the foreseeable future will facilitate the conduct of new mergers and acquisitions.
Разрабатываем Стратегии для собственников бизнеса в целях оптимизации группы компаний, решения нестандартных задач и продажи активов. Оказываем услуги по сопровождению сделок M&A, управлению непрофильными активами и проектами в целом.
