Insight

Digital Media M&A update

Read more about M&A trends in the Digital Media sector

Roderick Moon

Roderick Moon

Managing Director, KPMG Corporate Finance LLC

+1 917-270-2828

Global Tech M&A Overview

2021 has been a blockbuster year for Global tech M&A transactions with total deal values crossing the trillion-dollar mark, highest recorded in the past decade. Global tech M&A activity registered an aggregate deal value of $261B with 1,163 deal announcements in Q4’21.


2022 to Continue the M&A Streak

Riding through the wave of consistently high deal volumes in 2021 that soared to a record trillion-dollar mark, M&A deal activity is poised to pump up further in 2022. Key tech segments to watch-out for:

  • Acquisition spending on Information security/cybersecurity to increase
  • Application software and infrastructure software are second in line to show an uptick in acquisition activity

InFocus: State of the Global Data Management Market

The Target Addressable Market for global data integration & management was $12.6B in 2020 and is expected to grow to ~$18B by 2025.

Market drivers like low costs of data storage, use of AI/ML, growth in mobile and IoT devices, elastic cloud solutions, and improved data & analytics tools are fueling the growth of data volumes that businesses can leverage.

 



Digital Media M&A in Q4’ 21

Q4’ 21 recorded a total of 414 deals, 32% lower from Q3’ 21 with a total of 606 deals. The overall deal value for Q4’ 21 was $55.8B, a ~55% decrease on a Q-o-Q basis. The deal value in mega deals (>$1B) also decreased by 61% from $103.6B in Q3’ 21 to $40.6B in Q4’ 21, with 66% of the overall mega-deals value from U.S. targets. The deal count in mega deals decreased by 38% from 26 deals in Q3’ 21 to 16 deals in Q4’ 21. The digital media M&A market in Q4’ 21 was mostly driven by activity in the media services and digital media technologies segments. The U.S. dominated the global digital media M&A market both in terms of deal count (48%) and deal value (65%).

Digital Media M&A Market Snapshot

Deal Count

549 transactions in Q1’ 21


 

Sponsor Backed M&A Activity

Of the 414 digital media deals announced in Q4’ 21, 36 involved one or more financial sponsors, of which 22 are U.S. based targets. Financial sponsors contributed $11.2B in disclosed deal spending in Q4’ 21.

Domestic M&A and Cross-Border Deals
US dominated the digital media M&A landscape, both in terms of total deal count and deal value. The number of cross border transactions decreased by 24.4% from 217 in Q3’ 21 to 164 in Q4’ 21.

Deal Multiples
Digital media deal valuations had average EV/Rev. of 4.0x in Q4’ 21, lower than Q3’ 21 average EV/Rev. multiple of 5.4x. Average EV/Rev. for last 6 months is 4.8x. 


We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.


Footnotes

Note: All data is represented based on disclosed deal values for transactions as available in the sources.
Sources: eMarketer; Capital IQ, 451 Research, Mergermarket and other publicly available information; Borrell Associates



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