As an active advisor on acquisitions of public relations and integrated marketing communications firms, Davis+Gilbert provides insight on trends in the M&A market and published data about acquisition activity. In Davis+Gilbert’s most recent Public Relations Industry M&A Report, the firm provides an in-depth analysis of the public deals completed in the 2020 calendar year (based on publicly available data) and the market activity and trends in Q1 of 2021.
The data shows that a key trend from 2019 carried over to 2020 – private equity and private equity-backed PR shops remained active buyers in the market. Public holding company buyers remained less active compared to prior years. In addition, independent PR firms continued to dominate the buying, where the share of deals involving an independent PR firm in 2020 jumped to 79% compared to 67% in 2019.
Davis+Gilbert further reports that while some activity fell in 2020 compared to the year before, the numbers were very comparable to those of prior years, such as 2018, 2017 and 2016. These include the number of publicly-reported transactions as well as the number of deals involving the acquisition of firms with annual revenue greater than $25 million. The firm attributes this trend to a healthy market, even amidst uncertainty during the COVID-19 pandemic.
In addition, the first quarter of 2021 started off with 14 M&A transactions, four of which involved sellers with revenues in excess of $10 million. This demonstrates a trend in which size and scale continue to matter. Four of the 2021 transactions were also completed by PE firms, indicating both a greater number of PE deals and a greater percentage of PE deals than in the comparable period in either 2019 or 2020. This suggests that private equity is likely to be increasingly active as 2021 unfolds.