July 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Major deals profiled include IPG’s acquisition of Acxiom Marketing Solutions, S4 Capital’s acquisition of MediaMonks and Accenture’s acquisition of Kogentix.
  • The Equiteq Knowledge Economy Share Price Index was broadly flat over the month.

IPG’s acquisition of Acxiom Marketing Solutions gives it access to anonymized customer data to enhance its targeted marketing solutions

Target: Acxiom Marketing Solutions (AMS) is Acxiom’s legacy data management business. It consists of a team of 2,100 people and represents about three quarters of Acxiom’s total revenue.

Buyer: Interpublic Group (IPG) is one of the leading networks of advertising agencies.

Deal Value: $2.3bn

Deal Insight: At the beginning of July, the Wall Street Journal reported that Dentsu and IPG were both expected to submit offers to acquire part of Acxiom. IPG followed with its announced acquisition of AMS, which gave it access to customer data that can drive more targeted marketing campaigns for its clients. The deal comes as the leading marketing agencies are coming under pressure from major consultancies and technology firms entering the digital media space. These more recent entrants are utilizing strong data analytics solutions to build effective advertising campaigns.

Data ethics has become an important issue with the adoption of GDPR in Europe and the controversies surrounding Facebook and Cambridge Analytica. Acxiom is considered to have a strong reputation in data integrity, which will have supported the strategic nature of this deal and premium valuation metrics. AMS was part of Acxiom’s Marketing Services and Audience Solutions segments, which generated total revenue of $706m in the year to March 2018.

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H1 2018 Knowledge Economy Global M&A Update

Buyers focused on a smaller number of transformational deals in the first half of the year, as tapering of quantitative easing programs accelerates

By Ramone Param, Director, Equiteq

  • Strong rise in average deal size and valuation multiples in H1 2018
  • The number of completed deals fell 5% on H1 2017
  • Activity remains focused on IT services and management consulting
  • Equiteq Knowledge Economy Share Price Index continues to reach new highs

Across the global knowledge economy in the first half of the year, average M&A deal sizes and valuation multiples rose markedly, but the number of completed deals fell. Many buyers pushed ahead with a smaller number of larger transformational deals for their businesses at premium prices in the current low interest rate environment. This is against a backdrop of rising signs that quantitative easing programs are coming to an end across developed economies.

The following trends are discussed in more detail in our recent mid-year M&A update report.

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