BIA/Kelsey Reports 144 Local Digital M&A Deals in First Half of 2013, Continuing Two-Year Trend in the Sector

July 24, 2013
Press Releases

BIA/Kelsey’s ‘Local Media Investment Watch’ reveals investment trends across mobile, social, online and audio/video categories

CHANTILLY, Va. (July 24, 2013) – Current M&A activity within the local digital landscape – mobile, social, online, and audio/video – has kept pace with last year, indicating ongoing value and interest in interactive local media, according to BIA/Kelsey’s new Local Media Investment Watch. The first half of 2013 saw 144 local digital deals announced and/or closed, with total reported deal value at $7.2 billion, compared with 143 deals at $5.2 billion in the first half of 2012.

Local Media Investment Watch reports online as the biggest sector across the digital spectrum for both deal volume and reported deal value. In terms of growth, mobile is the most robust sector, with 37 deals valued at $1.8 billion in the first half of 2013 (due in large part to Google’s $1.3 billion acquisition of Waze), compared with 31 deals valued at $703.5 million in the first half of 2012.

BIA/Kelsey, adviser to companies in the local media industry, created Local Media Investment Watch from its comprehensive database of aggregated deals involving public and private companies operating in local digital media domains.

“This year has seen activity levels grow in the local digital landscape, with the value of the deals increasing from 2012 to 2013, driven in particular by a couple of significant acquisitions,” said Jeanne Dixon Dattilo, senior valuation analyst, BIA/Kelsey. “By examining M&A activity through the filter of local and digital, a picture begins to build on what’s moving the market, where there is exceptional growth and why that growth is occurring. From our analysis, it’s clear the energy around locally targeted digital media is accelerating.”

From January 2011 through June 2013, BIA/Kelsey tracked 742 total deals in the local digital marketplace, with $23.9 billion in reported value. While the categories are closely related, the market sees different strengths and weaknesses in each.

Mobile

154 deals with $3.7 billion in reported value
Major investment in mobile application/web development by marquee digital companies such as Google, Yahoo, Apple and Facebook.

Social

178 deals with $7.5 billion in reported value
Significant investments in niche C2C social networks that offer specific audience and content experiences. Examples include: Foursquare, which raised $41 million; Pinterest, which raised $200 million; and Tumblr, purchased by Yahoo for $1.1 billion.

Online

349 deals with $11.9 billion in reported value
Continued investment growth in verticals, like travel, home services and food, while rapid consolidation in loyalty follows a similar pattern to the rollup of the daily deals.

Audio/Video

61 deals and $859 million in reported value
Despite a significantly lower number of deals compared to other sectors, rapid growth in online video advertising will contribute to significant future ramp up.

“As consumer and business needs continue to change rapidly, media platforms and channels are merging,” said Jed Williams, vice president, consulting, BIA/Kelsey. “Companies are making major bets in interactive local technology to keep up with this fast-evolving marketplace. Nowhere is this more evident than in mobile, where online and social media companies are investing heavily to continually deliver best in class experiences.”

Webinar: “Digital Media M&A at the Halfway Mark”

BIA/Kelsey’s Jed Williams and Jeanne Dixon Dattilo previewed detailed findings from the first installment of Local Media Investment Watch during this webinar. They profiled M&A and funding activities during the first half of 2013 and discussed trends to expect in the second half of this year. Guest speaker Lem Lloyd, chief revenue officer at Fixya (former Yahoo executive and IDG advisor), also provided his unique insights on local digital investment activity. Now available to watch on-demand: Webinar Video | PDF of Slides

About Local Media Investment Watch

BIA/Kelsey’s Local Media Investment Watch examines the current transaction environment for public and private companies that operate in both the local and digital media domain. Using data compiled from a variety of transaction sources, such as Capital IQ, third party resources and proprietary knowledge. Local Media Investment Watch tracks acquisitions and private placement activity for the local digital media space. Data includes buyers, sellers, investors, transaction volume, reported values, transaction dates and terms, and company financial information where available. Companies are organized into one of the following categories: Online, Mobile, Social and Audio/Video. Deals tracked since 2011 and organized by industry segment are updated quarterly.

About BIA/Kelsey and BIA Capital Strategies

BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at https://www.bia.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey). Stay connected by subscribing to the firm’s bi-monthly newsletter.

BIA/Kelsey is affiliated with BIA Capital Strategies, LLC, a specialized, research-oriented investment bank serving the Communications, New Media and Internet industries. BIA Capital has completed more than $1 billion in transactions.