PwC Sees Increased Activity By Private Equity Firms in Media Sector

March 7, 2007 World Screen

NEW YORK, March 7: Private equity firms are expected to
continue investing in the entertainment and media sectors this year, according
to a PricewaterhouseCoopers report, after a strong 2006, which saw 282 deals
announced, worth investments of $114.6 billion.

Its new study, 2007 M&A Insights—U.S.
Entertainment and Media Industry, PwC
reports that 132 deals announced in 2006 are slated to close in 2007. Building
on this backlog of deal activity, corporate buyers and cash-rich private equity
funds are expected to continue investing in the sector, which includes
advertising and marketing, print and broadcast, video and digital content
distribution and portable media.

"We expect private equity buyers to pick up speed this
year as funds continue raising record amounts of money and firms continue to
invest in the E&M sector," said Thomas M. Rooney, Transaction Services
leader of the U.S. Entertainment & Media Practice. "Factors such as
continued technological convergence, shifting consumer content consumption and
evolving technology will afford new opportunities for strategic
acquisitions."

The total number of sector deals in 2006, including those
where transaction value was not provided, increased 13 percent to 981. This
represents a 10 percent compound annual growth rate from 2002 through 2006.

Erik Miller, Transaction Services’ Entertainment and Media
director, added: "As consumers' media options continue to expand, E&M
companies will continue to pursue the optimum business model for attracting and
retaining customers. These efforts should lead to deals across a number of
E&M sectors, driven by the convergence between traditional print, broadcast
and home video distribution plus the growing opportunities in digital content
distribution."

Citing Private Equity Intelligence, the PwC report also
noted that in 2006, private equity firms raised $404 billion globally—a
28 percent increase from 2005. U.S.-focused funds raised $252 billion, roughly
63 percent of the global total and a 47 percent increase from 2005.