PwC: Merger M&A Activity Likely to Rebound

NEW YORK: Merger and acquisition activity in the U.S. entertainment and media (E&M) industry could potentially rebound this year, according to PricewaterhouseCoopers, following a 49-percent decline in 2009.

The PwC Transaction Services 2010 US Entertainment & Media M&A Insights report indicates that the E&M completed deal value totaled $77.4 billion in 2009, 49-percent lower than the previous year. The number of deals, meanwhile, fell 29 percent to 714. Completed E&M deals in 2009 represented 12.3 percent and 13.3 percent of total completed U.S. M&A transaction value and volume, respectively.

“Continuing signs of gradual economic recovery and an anticipated easing of credit markets point to a potential uptick in E&M deal activity,” said Thomas Rooney, Entertainment & Media Leader at PwC Transaction Services. “While Entertainment & Media companies and investors are currently focusing on driving efficiencies by zeroing in on their core competencies, in 2010, we believe there will also be a renewed focus on new media opportunities as the industry’s tolerance for risk rebounds and attention shifts towards higher growth.”

He continued: “Responding to the shift toward new media, E&M companies are seeking opportunities to capture value online with mobile and technology leading M&A activity. Given the level of success that certain technology giants have had in revolutionizing the distribution of media through convergence, we expect similar interest to continue well into 2010.”

PwC notes that private-equity-backed M&A activity is expected for 2010. Private-equity firms and "strategic buyers" will be looking out for cash-strapped companies in the broadcasting, cable, gaming and publishing sectors. The report states that in 2009, Chapter 11 bankruptcies among U.S.-based E&M companies increased 30 from 10 in 2008.