Industry Report - Update on M+A Activities (2008 January)

BSG's last report on M&A activity was in July 2007. In the past six months, fifteen new deals have been announced. BSG estimates the value of those acquisitions to be worth US$125.7 million. Seven of the total were China-based deals. India and Hong Kong each recorded three, while Singapore and the Philippines each recorded one acquisition. Two of the deals accounted for 70% of the total dollar value. Mumbai-based Network 18 acquired 40% of Infomedia for US$45 million and Xinhua Finance Media paid US$43 million to purchase JCBN Company - a Shanghai-based advertising agency.

Overall in 2007, the value of M&A deals increased by 75% compared with the full-year total for 2006. BSG recorded a 2007 full-year total of US$469.6 million, up from $269 million in 2006. The average deal size also increased jumping from US$12.2 million in 2006 to $14.2 million last year. The number of deals reached a new high - 33 transactions versus 22 in 2006.

Although the Asian B2B media sector is posting strong year-on-year growth, the value of deals in the Asian market remains a small fraction of the U.S. market. Recently, the Jordan Edmiston Group (JEGI), a media-focused investment bank, announced that in the U.S. there were 838 media deals in 2007 valued at US$108 billion. That is a 79% increase over the same figure in 2006. The number of acquisitions of trade magazines in the U.S. dropped from 42 in 2006 to 38 deals worth $3.2 billion versus US$6.0 billion in 2006. Meanwhile, the number of acquisitions in the U.S. exhibitions and conferences sector increased to 66 up from 52 in 2006. The value of those deals also rose from US$875 million to US$1 billion.

BSG has been tracking M&A activity in the business media and events sector in Asia since 2000. Although the majority of the deals continue to be small, the level of interest in the region and the sector continues to gain momentum. BSG is forecasting 2008 will be another year of record results with 37 transactions valued at US$650 million, an increase of 38%.

It is important to note that, due to the size and nature of many of the deals, the financial details are often undisclosed. In these cases, for the purposes of this report, 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.