The post-pandemic media acquisitions trend that kicked off earlier this year has continued into the summer; August has seen big buys from Axel Springer and Future Publishing, with the appetite for deals staying strong – even publishers that haven’t been doing so well have managed to find buyers.
Takeaways
- Media M&A activity was way down in 2020. Lower by almost 20% in value on 2019, there were just over 1,000 deals posted for the whole of the year. But the first period in 2021 saw a ‘bounce-back’ with business transformation and ‘future-proofing’ driving the M&A agenda after the challenges of 2020.
- Three quarters of the way into the year, acquisitions are still high on the agenda for some of the industry’s leading players. The biggest deal on the table is Axel Springer’s purchase of news brand Politco, rumoured to be worth $1 billion.
- The next biggest trade is probably specialist publisher Future Publishing’s acquisition of Dennis Publishing. Worth £300 million, the acquisition brings iconic brands like the Week and specialist titles including IT Pro and Minecraft World into Future’s portfolio of 160 publishing brands.
- Back in the US, VOX Media, which publishes titles as diverse as New York magazine and tech-news site The Verge, has purchased Punch, a media company focusing on drinks and cocktail culture. The value of the deal has not been disclosed.
Buying motivations
- Axel Springer, owner of digital high-flyers Insider and Morning Brew, described the purchase of Politico as bringing the company ‘an authoritative voice offering inside perspective and analysis of politics and policy’. That is true of Politico’s consumer-facing news site, but the deal also brings a strong B2B subscription product. That combined with a large consumer funnel makes Politico a very attractive purchase.
- Where other magazine publishers have been cutting back, Future has been expanding. The firm has made several acquisitions over the last five years, from magazine business TI media and insurance comparison site GoCompare. CEO Zillah Byng-Thorne said of Future’s acquisition strategy, “Our focus is: in the markets in which we operate, we want to have market leadership.”
- The agreement to buy Punch marks Vox Media’s fifth acquisition in three years. Punch will be kept as an independent editorial brand within Vox’s food and restaurant media brand Eater. “As a sister publication to Eater, Punch’s coverage of drinks and cocktail culture will complement Eater’s industry-leading coverage of food and restaurants,” said Amanda Kludt, Senior VP at Vox.
Underlining the media sector’s hunger for acquisitions, Washington- political-news business The Hill has also been sold for $130 million. Despite suffering a slowdown in traffic endured by many politically focused sites, the business has been bought by America’s largest local TV company Nexstar Media Group.
As one of the most popular politics sites in the US, commentators have questioned whether the deal was as much as management had hoped for. But Media Operator’s Jacob Donnelly says $130 million is a fair price.
“For a business dependent on advertising for its revenue, seeing traffic drop by upwards of nearly 18% can’t be good for the bottom line. Therefore, selling at 3.25x 2020’s revenue is probably a good place for The Hill.”
