2013 OUTSELL SIGNATURE EVENT

Transcription

1 2013 OUTSELL SIGNATURE EVENT Annual M&A Outlook presented by Wilma Jordan, Chief Executive Officer The Jordan, Edmiston Group, Inc. October 3, 2013

2 M&A Overview Media, Information, Marketing and Technology M&A Market Continues to be Driven by Small Deals 2

3 Small Deals Driving M&A 2012 Through August # Deals % Total Deals 2013 Through August # Deals % Total Deals % Change $1 Billion or More 8 0.8% % 25.0% $100 $999 Million % % (14.8%) Under $100 Million % % 2.0% Total % % 1.1% Average Deal Size (in millions) $1 Billion or More (w/o $22 billion Publicis/Omnicom deal) $2,976 $1,732 (41.8%) $100 $999 Million $275 $255 (7.5%) Under $100 Million $13 $12 (6.1%) Source: JEGI Transaction Database 3

4 Most Active Strategic Buyers (through August 2013) Yahoo leads the pack with 20 acquisitions 4

5 Hot Markets New Media 1 Mobile 2 E-Commerce 3 Online Video Traditional Media Information Exhibitions Marketing Services Newspapers 5

6 1 Mobile Mobile A Very Hot Market Global mobile ad market expected to grow 89% in 2013 to $16.7 billion, comprising 14.2% of global digital ad spend of $117.6 billion Facebook s share of global mobile Internet ad revenue forecasted to reach 15.8% in 2013, up from just 5.4% in 2012 Google still the 800 pound gorilla expected to capture more than 50% of global mobile Internet ad revenue in 2013 US mobile ad spending forecasted to grow 77% this year, to $7.3 billion, or 44% of the global market Global Mobile Ad Spend 58.2% CAGR Taking advantage of this HOT market, Millennial Media and YuMe, two mobile ad networks, went public in 2013 Source: emarketer 6

7 1 Mobile Case Study Twitter Acquires MoPub for $350 million Target Overview: Mobile ad exchange that helps mobile publishers manage their ad inventory Twitter Rationale Already driving significant revenue from mobile; this deal vaults Twitter to the forefront of race to combine effective targeting and mobile ad-buying Pre-acquisition, Twitter expected to account for nearly 2% of 2013 global mobile Internet ad revenue 1 Insider View We look at this deal as a big bet on the mobile ecosystem, which is growing incredibly quickly mobile advertising is in the early stages, and Twitter and MoPub together give us the opportunity to help drive what mobile advertising becomes. Kevin Weil, VP, Revenue, Twitter 1 emarketer 7

8 2 E-Commerce E-Commerce A Strong Growth Market Global B2C e-commerce sales grew 21.1% in 2012, topping $1 trillion, and are expected to grow 18.3% to $1.3 trillion in Sales in North America grew 13.9% to a world-leading $365 billion in 2012; expected to increase over 12%, to $409 billion, in 2013 In 2013, despite strong growth in North America, Asia-Pacific will be leading region globally for e-commerce sales Strong growth propelling e-commerce software market to $3 billion in 2013, with growth at CAGR of ~12% through Worldwide B2C E-commerce Sales 1 emarketer; 2 Companies and Markets 8

9 2 E-Commerce Case Study Huntsman Gay Global Sells Hybris to SAP for $1+ billion and Acquires MyWebGrocer for $200+ million Target Overview: Hybris omni-channel commerce technology platform; MWG shopping and shopper marketing software and service Huntsman Gay Rationale Provided a strong investor return with the sale of Hybris, and then reinvested into the fastgrowing and rapidly transforming e-commerce technology sector via MWG Insider View Changing consumer behavior is pressuring grocers to adopt digital solutions. With new e- commerce focused entrants taking market share, we believe that grocers will increasingly look to technology platforms that enable consumers to plan and shop online. Hudson Smith, Principal, HGGC 9

10 3 Online Video Online Video A Rapidly Expanding Market Americans consuming online video at a record-breaking pace in June: 183 million Americans watched more than 44 billion online content videos Online video ad views reached a new peak of 20.1 billion, a 27% jump from the previous high of 15.8 billion in May 1 As a result, ad dollars quickly moving from TV to online video this year, 8 in 10 media buying professionals planning to spend more on online video 2 US online video ad spending to grow 40+% in 2013 to $4+ billion and at a CAGR of 28.7% through This growth driving consolidation, as large media and entertainment companies look to solidify their positions US Digital Video Ad Spend 28.7% CAGR comscore; 2 RocketFuel; 3 emarketer 10

11 3 Online Video Case Study AOL Acquires Adap.TV for $405 million Target Overview: Online video advertising platform AOL Rationale Provide AOL with a leading position in premium and programmatic video advertising Help AOL provide a powerful cross-screen solution for brands, agencies and publishers Insider View "Two trends are prevalent in the video space right now the movement from linear television to online video and the shift from manual transactions to programmatic media buying. Adap.tv is positioned squarely in front of the huge opportunity these trends are presenting." Tim Armstrong, Chairman & CEO, AOL 11

12 4 Information Information A Market for Continued Growth and Investment Global Information Industry revenue estimated to reach nearly $515 billion in 2013; growing 2.5% from A diverse marketplace that has been greatly affected both positively and negatively by technology over the past 5-7 years Data delivered almost entirely via online/software subscriptions or SaaS-based solutions Content-centric software technology or software that enables information delivery, workflow and analytics This market continuing to consolidate, as large information companies invest in new datasets and technology platforms 1 Outsell 8.0% 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Global Information Industry Growth Rate F2014F2015F2016F 12

13 4 Information Case Study IHS Acquires R.L. Polk for $1.4 billion Target Overview: Provider of automotive information and intelligence IHS Rationale Combination of R.L. Polk and IHS Automotive creates a more comprehensive offering for customers and significantly enhances customers insights and decision processes across the full vehicle lifecycle Insider View No one has connected automotive information so comprehensively in markets around the world, or created the analytics solutions and tools that we are currently developing to support the strategic decisions of our customers. Scott Key, President & CEO, IHS 13

14 5 Exhibitions Exhibitions A Traditional Media Growth Market Despite most traditional B2B and B2C media struggling over the past decade with the rapid rise of the Internet, exhibitions continuing to grow Up 1.5% in 2012, despite significant economic headwinds and fear of the fiscal cliff Growth expected to continue through 2015, showing a dramatic rebound from the downturn in 2008 and Overall Exhibition Industry Exhibitions filling an important void in the digital ecosystem the opportunity to meet face-to-face Total Events industry endowed with excellent business dynamics, including strong free cash flow 1 CEIR: Center for Exhibition Industry Research 14

15 5 Exhibitions Case Study Onex Private Equity/Emerald Expositions Acquires Nielsen Expositions for $950 million / Target Overview: Operator of large, business-to-business exhibitions in the US Onex Rationale Large investment in exhibition platform shows strong faith in the industry s continued growth, and in the events business model, with its strong cash flow characteristics Provides great opportunity to partner with management team to build the company through continued expansion of its existing shows, as well as select acquisitions Insider View Onex s acquisition of our business has given us a partner that will help Emerald pursue new growth opportunities, while continuing to deliver exceptional value to our exhibitors and attendees. David Loechner, CEO, Emerald Expositions 15

16 6 Marketing Services Marketing Services Growth via Consolidation Global digital ad spend expected to reach $117.6 billion in 2013, up 12.6% over 2012, and grow at 12.3% CAGR through US forecasted to drive $42.3 billion of digital ad revenue in 2013, comprising 36% of the global market With finite ad dollars, marketing services companies find growth via acquisition/ consolidation Recently, global agency holding companies merging to spur growth / deepen talent pool Also looking to fend off new market entrants, such as Accenture, Salesforce, Oracle, IBM, Deloitte, etc. 12.3% CAGR Global Digital Ad Spend 1 emarketer 16

17 6 Marketing Services Case Study Publicis and Omnicom Merge $21.9 Billion Target Overview: Global advertising, marketing and public relations companies Publicis/Omnicom Rationale Create the largest global ad agency (by revenue); combined entity with greater resources to compete in digital/technology, and wider global coverage, especially in emerging markets Publicis acquires much needed bench strength, with John Wren (CEO of Omnicom) becoming the immediate successor to Maurice Levy (CEO of Publicis) Insider View this new company reflects our vision of retaining the best talent, attracting an incredible roster of clients and leading innovation setting a new standard for supporting clients with integrated messaging across marketing disciplines and geographies. John Wren 17

18 7 Newspapers Newspapers A Growth Industry? Newspapers in consistent decline since 2005, with quarter-over-quarter US print revenue losses every quarter except Q1-06 and a 6% decline in Another industry decline in H1 2013, with local newspapers falling 4% and national newspapers falling 4.6% 2 So why are Warren Buffet, Jeff Bezos and other billionaires investing in newspapers? Mr. Buffet sees potential for a rebound, especially for local newspapers with #1 market positions and strong franchise values Mr. Bezos aims to re-kindle faltering Wash Post; mobile platforms, Big Data, predictive analytics to create viable newspaper model We shall see 1 NAA: Newspaper Association of America; 2 Kantar 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 US Newspaper Total Print Revenue 18

19 7 Newspapers Case Study Jeff Bezos Buys the Washington Post for $250 million Target Overview: Daily newspaper Bezos Rationale Using his innovative business style to transform the newspaper business start asking questions and conducting experiments in the quest for a new golden era at The Post Insider View I provide runway financial support over a lengthy period, in which the management can experiment to find a profitable formula for delivering the news. Jeff Bezos, Chairman & CEO, Amazon 19

20 Predicting the Future Predictions for the Next 12 Months Aggregation/Consolidation among mature/legacy companies will continue think Publicis/Omnicom; Nielsen/Arbitron; Gannett/Belo; Dentsu/Aegis due to low growth economy, coupled with rapid technological changes In the US, a sluggish economy coupled with major legislative enactment (e.g., Obamacare) creates business uncertainty, resulting in many nervous BOD s that will not make substantial M&A bets therefore, 2014 M&A activity resembles 2013 Technologically advanced companies continue to challenge existing company models think LinkedIn vs. job boards; Angie s List/Yelp vs. yellow pages; Twitter/Facebook vs. newspapers/evening news; etc. The impact of marketing automation accelerates and is the driving force behind marketing services M&A which company will be the global advertising agency of the future WPP, Publicis/Omnicom, Dentsu? Or, Accenture, Adobe, IBM? 5. And finally 20

21 Predicting the Future Prediction #5.When people ask me to predict whether the stock market is going to soar like an eagle or drop like a stone in the next 15 months, I will say.. 21

22 Predicting the Future Absolutely yes no doubt about it and you can take that to the bank! Thank you. Wilma Jordan, CEO The Jordan, Edmiston Group, Inc. 22

23 About JEGI Leading independent investment bank serving the media, information, marketing and technology sectors Industry Leadership With deep relationships and expertise across global and emerging media, information, marketing and technology sectors, JEGI anticipates trends and provides impactful advice. Independence JEGI is committed to the success of each client assignment, with no sales and trading, lending or private equity investing to conflict with advisory client priorities. Focus JEGI executes M&A sales and divestitures with integrity and best practices, conducting an efficient, highly effective sale process to maximize value for clients. Experience After 25 years and more than 500 transactions, JEGI consistently exceeds expectations and delivers successful results, often with unexpected buyers. Results JEGI s team-driven process achieves the highest transaction success rates and enthusiastic endorsements from satisfied clients. 23

24 JEGI At the Core of Evolving Markets Technology Marketing Integrated Media Software & Information Global Corporations Private Equity/Venture Capital-Owned Companies Entrepreneurial Owners Direct insight into M&A market conditions, valuation drivers and buyers hot-buttons Unparalleled network of strategic media, information, marketing and technology companies 24

25 JEGI Leading The Market JEGI is the consistent market leader in transactions completed among the sectors it serves Tech M&A Banking Review* TOP 10 ADVISORS FOR US TECHNOLOGY M&A DEALS - WEB-BASED TRANSACTIONS #1 7 th Consecutive Year *Source: 451 Group 25

26 Industry-Leading Domain Expertise 24 transactions, over $2 billion in enterprise value in 2012 and 2013 Notes: In each transaction listed above, JEGI s client is mentioned first. One deal in 2013 has closed, but has not been officially announced. 26

27 The Jordan, Edmiston Group, Inc. 150 East 52 nd Street, 18th Floor New York, NY Phone: (212) Fax: (212) Wilma Jordan, CEO,