Jason Jones: The digital advertising industry consolidation continues. Interestingly, most of the acquisitions have been cash deals. Why aren't the big guys using their pricey stocks? Maybe the acquirees have negotiating leverage. (Or maybe the acquirors are hallucinating that their stocks are undervalued).
A list of recent M&A in the sector is below. But first, here are the single folks still waiting to be scooped up:
Acquantive, Valueclick, Burst Media, and AdPepper, the latter two of which trade on London's AIM. How much might the U.S. ones go for? AQNT is worth $44 if you use the TFSM take-out multiple (23x), $60 if you use the DCLK multiple (33x), and $75 if you use the Right Media multiple (10x EV/Revs). VCLK is worth $44 if you use the TFSM multiple, $66 if you use DCLK, $70 if you use Right Media. And then of course there are all the private beauties: Blue Lithium, Tacoda, Efficient Frontier, Did-It, etc. Go to it, bankers!
Recent Digital Advertising M&A
Google for Doubleclick: $3.1b cash (32x '07 EBITDA - my estimate) - ad serving, SEM, affiliate network
Publicis for Digitas (DTAS): $1.3b cash (16x '07 EBITDA) - digital ad agency
Yahoo for 80% Right Media: $680m cash & stock - implied value = $850m (10x revs - rumored value) - ad media exchange
WPP for 24/7 Real Media (TFSM): $649m cash (23x '07 EBITDA) - media network, ad serving, SEM
AOL for AdTech: terms undisclosed - European ad server
Aegis for Trigger Communications: terms undisclosed - digital ad agency
Fox Interactive Media for Strategic Data Corp: terms undisclosed - publisher side ad server and site optimization
Doubleclick for Falk eSolutions: terms undisclosed - European ad server