Industry Report - Update on M+A Activities (2007 July)

In the six months since our last report on M&A activity, sixteen new deals have been announced. BSG estimates that the total value of these acquisitions is US$341 million. This exceeds the total for the whole of 2006. Unsurprisingly, the emphasis has largely been on China-focused deals which accounted for six of the total. Five other deals were based in South-East Asia and three in India. Hong Kong and Australia recorded one deal each.

It is important to keep in mind that although the deal volume and value is growing, the market for Asian B2B media M&A activity is still a tiny fraction of the US market. According to a report issued this month by The Jordan Edmiston Group (JEGI), in the U.S. In the first half of 2007, there were 399 deals in the whole media sector totalling US$76 billion. Of that total, US$3.7 billion was generated from transactions involving B2B magazines, exhibitions and conferences and directory publishing. The growth in the value of US M&A deals continues to be extraordinary. In fact, the first half of 2007 in the US has already surpassed the total for 2006 which was US$60.6 billion.

BSG has been tracking M&A activity in the business media and events sector in Asia since 2000 and although most of the deals are small, there continues to be a steady stream of interest in the region and the level of interest is clearly accelerating. The majority of the deals involve the acquisition of small, private companies by multi-national companies. There is very little trading between Asian companies, although this is beginning to become a more important component of the deal flow. We expect this to continue to change as a number of companies are flush with cash from recent IPOs.

Due to the size and nature of many of the deals, the financial details are often undisclosed. In these cases, BSG uses its industry knowledge to estimate the size of the deal. As these estimates sometimes involve the use of confidential data, those figures are not revealed individually in this report which publishes only publicly-announced information.