Enterprise Telecom Communication Services and Solutions M&A Transactions and Valuations

Between Q1 2020 and Q2 2024, acquirers deployed $56 billion in enterprise telecom communication services and solutions. The sector encompasses all levels of enterprise Wi- Fi connectivity, telephony, communications IT infrastructure, and related communication services for businesses.

Most transactions conducted and capital invested in the enterprise telecom communications services and solutions sector were by European-based acquirers. European acquirers contributed $26 billion across 201 transactions, highlighting their appetite for larger transactions. North American acquirers also contributed significantly with 35% of all capital invested in the sector across 119 transactions.

Strategic mergers and acquisitions contributed to the majority of transactions and capital invested in the sector with an average deal size of under $90 million. This highlights the appetite for middle-market strategic acquisitions and add-ons. Buyout and leveraged buyout transactions accounted for approximately one-third of all deals, with an average size of over $160 million.

Enterprise telecom communication services and solutions founders and shareholders should be aware of exit opportunities presented by strategic acquirers from Europe and North America.

• The valuation multiples are based on a sample set of publically listed podcasting and podcast advertising companies and M&A transactions in the sector. The data was collected on August 29, 2024.
• The sample set trades at an enterprise value to EBITDA multiple range of between 5x and 21x with an increase in average multiples as the enterprise value increases.
• Average enterprise value to revenue multiples ranged from 1x and 5x.      

• The median transaction size ranged widely with peaks of over $200 million seen in Q4 2020, Q2 2020, and Q2 2024. This was driven by large transactions conducted by strategic acquirers. 
• The median deal size was under $50 million for 9 of the 16 quarters between the start of 2020 and the end of 2023. This could indicate an abundance of activity in the lower middle markets and an appetite for smaller transactions.   
• Since Q4 2023, the median transaction size has increased significantly, which could signal the rebound of large acquisitions in the sector and an increase in capital available for acquisitions. 

• Between Q1 2020 and Q2 2024, $56 billion was deployed across 424 enterprise telecom communication services and solutions acquisitions. The average transaction value was $132 million, highlighting the volume of transactions in middle and upper-middle markets.  
• The most significant deployment of capital, $15 billion, occurred in Q2 of 2021. Several large strategic acquisitions in Europe drove the large capital outlay in both Q2 of 2021 and Q3 of 2020.   
• While the deal count shows variability, it remains above 16 per quarter. This consistency indicates a stable interest in deal-making, even as the investment amounts fluctuate. The exception was Q2 of 2020 when only 11 transactions were conducted. This was likely driven by market uncertainty caused by the pandemic and economic lockdowns. The largest deal count in the enterprise telecom communication services and solutions occurred in Q1 of 2022 with 34 M&A transactions.

• Transactions by strategic acquirers in M&A transactions dominated the sector. They contributed $31 billion of capital invested in the sectors while conducting 288 transactions. The average transaction size of $90 million highlights the appetite for middle-market acquisitions. 
• Buyouts and leveraged buyouts accounted for $19 billion of capital invested across 119 M&A transactions in the enterprise telecom communication services and solutions industry. The average transaction size of $160 million indicates the appetite for private equity acquisitions in the uppermiddle market. 
• Add-ons and other transactions accounted for less than 10% of capital deployed respectively.

• European-based acquirers dominated the capital invested in the enterprise telecom communication services and solutions sector, with over $26 billion across 201 transactions. This could be due to a variety of factors, including the demand for upgrading legacy infrastructure, larger margins in Europe, or the abundance of smaller firms leading to role-up opportunities.  
• Acquirers based in Italy, the United Kingdom, and Germany were the most active in the sector by deploying 13%, 11%, and 5% of total capital respectively.
• North American acquirers, particularly in the US and Canada, conducted roughly one-third of capital invested ($20 billion) and deal count (133) in the sector. The dominance of large telecommunication companies in the sector may affect the competitiveness of the enterprise solutions sector leading to fewer acquisition targets.
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital deployed. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of enterprise telecom communication services and solutions transactions, but each deal tends to be small, reflecting diverse capital market activities.

Deal Spotlight:

DALY SYSTEMS

Daly Systems is a UK-based provider of telecommunications solutions for businesses. The company offers connectivity, telephony solutions, cloud solutions, infrastructure, IT services, and other related services, providing clients with customized enterprise solutions.

The company was acquired by Onecom for an undisclosed amount through their financial sponsors LDC and Ares Management.
For more information on how transaction structures impact seller liquidity, see Jahani and Associates’ article here.

 

Enterprise telecom communication services and solutions include enterprise Wi-Fi connectivity, telephony, communications IT infrastructure, and related communication services. The sector is dominated by large acquisitions by European strategic acquirers and smaller transactions conducted by North American acquirers. 

Enterprise Telecom Communication Services and Solutions companies should be mindful of exit opportunities. EBITDA multiple in the sector ranged between 5x and 21x in the period with technology and intellectual property contributing significant increases in multiples. 

Sources: Pitchbook Data, Jahani and Associates (1), (2).

Infant Apparel Transactions and Valuations

Between Q1 2020 and Q4 2024, over $3 billion was deployed across 175 M&A transactions in the infant apparel sector by global firms, with an average deal size of around $18 million. Companies in the infant apparel industry typically trade at an enterprise value to revenue multiple around 2x, and an enterprise value to EBITDA multiple around 11x.

The infant apparel sector shows broad global participation, with significant investments and deals occurring globally. This highlights the global interest and opportunities in the infant apparel market, with various regions seeing growth potential.

The infant apparel industry encompasses the production, distribution, and retail of clothing designed specifically for infants and young children up to three years old. This industry includes a wide range of garments such as bodysuits, onesies, tops, bottoms, dresses, sleepwear, outerwear, and accessories like hats and socks. The clothing is crafted with special considerations for comfort, safety, and ease of dressing, often using soft, hypoallergenic materials that accommodate the sensitive skin and unique needs of infants and toddlers. The market also includes seasonal and occasion-specific apparel, such as winter wear, summer outfits, and festive clothing.

The infant apparel industry is growing due to rising birth rates and population policy changes—particularly in the Asia Pacific region—the convenience and growth of ecommerce, increasing demand for sustainable products, and the impact of social media and influencer endorsements that drive interest in premium baby clothing, enhancing market reach and sales.

• The valuation multiples are based on a sample set of private M&A transactions and publicly listed minerals and mining companies in the sector. The data was collected on August 29, 2024.
• The sample set typically trades at an enterprise value to revenue multiple range between 0.4x and 2x, staying consistent in this range as the enterprise value of the business increases.
• It is typical for businesses in the retail industry to trade on EBITDA multiples where managing operating expenses and margins are key to growth and investor appeal.
• Enterprise value to EBITDA multiples typically ranged between 8x and 14x. The average enterprise value to EBITDA multiple stayed consistent as the enterprise value increased.

• Between Q1 2020 and Q4 2024, over $3 billion was deployed across 175 M&A transactions in the infant apparel sector by global firms, with an average deal size around $18 million.
• Q2 2022 reflects the period with the most significant deployment of capital, $654 million across 6 deals, while Q1 2020 experienced the highest deal count with 17 deals and a total capital invested of $81 million.
• The average deal count was 10 deals per quarter, highlighting the consistent interest in deal-making in this industry due to its significant growth potential.
• The largest completed transaction was the full acquisition of Vertbaudet by Equistone Partners Europe through a $236 million leveraged buyout on July 26, 2021.

• The United Kingdom and South Korea were the top two countries for capital investment in infant apparel M&A transactions, receiving 58% ($10 billion) and 26% ($4.6 billion) respectively.
• The United States and the United Kingdom lead in the number of deals conducted, with the US having the highest percentage at 24% (43 deals), and the UK accounting for 12% (22 deals).
• The data shows a wide global participation in the infant apparel sector, with investment and deals occurring in numerous countries beyond the major players. Countries like India, the Netherlands, and China also show considerable activity, suggesting global interest and opportunities in the infant apparel market, with various regions seeing growth potential.

• Buyouts/leveraged buyouts (LBOs) lead in terms of capital invested, with $11.3 billion across 65 deals. This indicates that buyouts are a dominant strategy in the market, reflecting investor confidence in scaling operations or restructuring businesses for higher returns.
• Mergers and acquisitions (M&A) have the highest deal count with 98 transactions, but a relatively lower capital investment of $800 million. This suggests that while M&A is a frequent activity, the deals are generally smaller in scale or value compared to buyouts.
• Management buy-ins (MBI) and initial public offerings (IPOs) are notable for high capital investment despite lower deal counts. MBIs have attracted $9.33 billion across just 3 deals, and IPOs have seen $5.71 billion across 14 deals.
• The diversity in deal types suggests a broad range of investment strategies within the market. From capital intensive buyouts and IPOs to smaller add-ons and divestitures, the landscape indicates flexibility and varied risk appetites among investors, catering to different stages of business development and market opportunities.

Deal Spotlight:

JOJO MAMAN BÉBÉ

JoJo Maman Bébé is a multi-channel maternity wear and baby clothing retailer with stores in the United Kingdom. Founded as a mail-order seller in 1993 by Laura Tenison, it was acquired in 2022 by Next and Davidson Kempner Capital Management.

Next acquired a 44% of the firm’s shares, with the other 56% acquired by investment companies managed or advised by the hedge fund Davidson Kempner Capital Management. The shares were acquired from existing JoJo shareholders including founder and former CEO, Laura Tenison.

JoJo Maman Bébé was acquired at an enterprise value of $49 million with a revenue of $94 million and an EBITDA of $4.5 million. This resulted in an EV/Revenue multiple of 0.51x and a EV/EBITDA multiple of 10.6x.

The infant apparel industry has demonstrated substantial global participation and significant growth potential, with over $3 billion invested across 175 M&A transactions between Q1 2020 and Q4 2024. 

This sector is growing due to rising birth rates, the expansion of e-commerce, growing demand for sustainable clothing, and the impact of social media and celebrity endorsements. These drivers are fueling industry growth and sustaining significant deal activity, with buyouts and mergers dominating the investment landscape. This dynamic environment showcases a variety of strategic opportunities for investors in the market.

Sources: Expert Market Research – Baby Apparel Market Size, Trends, Share Growth 2024-2032, Fortune Business Insights – Baby Apparel Market Size, Share, Trends, Forecast, 2032, Verified Market Research – In-Depth Industry Outlook: Baby Apparel Market Size & Forecast, IMARC Group – Baby Apparel Market Size, Share & Growth, USD Analytics – Baby Apparel Market Demand and Growth Insights 2023.

Media Content Protection Software M&A Transactions and Valuations

In the media content protection sector between Q1 2020 and Q2 2024, $4 billion was deployed by acquirers; 210 deals were conducted with an average transaction size of $22 million. The sector includes intellectual property protection software serving the media and advertising industries with large applications in marketing and entertainment.

Most transactions conducted and capital invested in media content protection software were by US- and European-based acquirers. US-based acquirers accounted for 88% of all capital invested in the sector across 89 transactions. European acquirers contributed $800 million across 85 transactions, highlighting their appetite for smaller transactions.

Buyout and leveraged buyout transactions accounted for the majority of capital deployed in media content protection software acquisitions. Strategic mergers and acquisitions contributed to the majority of transactions in the sector with an average deal size of under $4 million. This highlights the appetite for smaller strategic acquisitions and add-ons.

Media content protection software founders and shareholders should be aware of exit opportunities presented by strategic acquirers from the US and Europe.

• The valuation multiples are based on a sample set of publicly listed podcasting and podcast advertising companies and M&A transactions in the sector. The data was collected on August 27, 2024.
• The sample set trades at an enterprise value to EBITDA multiple range of between 9x and 25x with an increase in average multiples as the enterprise value increases.
• Average enterprise value to revenue multiples ranged from 1x to 6x.      

• The median transaction size has ranged significantly with peaks of over $100 million seen in Q4 2023. This was driven by large transactions conducted by private equity firms. 
• Transactions in the sector appear to have a seasonal trend with the largest annual quarter median transactions occurring in Q4 2020, Q4 2021, and Q4 2023. This is likely driven by annual budgets in the entertainment industry and the demand to close larger acquisitions before the end of the financial year.   
• Median transaction size has remained low in 2024, indicating an appetite for smaller transactions. 

• Between Q1 2020 and Q2 2024, $4 billion was deployed across 210 media content protection software acquisitions. The average transaction value was $22 million, highlighting the volume of transactions in lower middle and middle markets.  
• The most significant deployment of capital, $653 million, occurred in Q2 of 2021. This is likely due to the low interest rates and high investments in technology as the global economy reopened following the pandemic.   
• While the deal count shows variability, it remains above 7 per quarter. This consistency indicates a stable interest in deal-making, even as the investment amounts fluctuate. The largest deal count was in Q3 of 2021, 21 transactions.

• Buyout and leveraged buyout transactions dominated M&A capital invested transactions in the sector. They contributed 88% of all capital in the industry with $3.5 billion, while conducting 33% of all transactions. The average transaction size of $51 million highlights the appetite for larger acquisitions. 
• Strategic mergers and acquisitions accounted for the majority of deals, 128 acquisitions, and $480 million of capital invested in the media content protection software sector. The average transaction size of under $4 million indicates the appetite for strategic acquisitions in the lower market. 

• US-based acquirers dominated the capital invested in the media content protection software sectors, with over $3 billion across 88 transactions. This could be due to many factors, including the historical dominance of the Hollywood film industry, the complex nature of intellectual property law in the US, or the abundance of small companies in the sector.  
• European acquirers conducted the largest number of transactions in the sector, 85, but contributed less than half of the capital deployed than US-based acquirers, with $800 million. The significant deal count indicates an appetite for smaller media content protection software acquisitions and the abundance of smaller and independent companies in the industry.
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital deployed. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of media content protection software transactions, but each deal tends to be small, reflecting diverse capital market activities.

Deal Spotlight:

Ridout & Maybee

Ridout & Maybee is a Canadian intellectual property company that offers clients access to IP expertise and experience across a range of technical areas including the media industry. The company operates using leading technology to support IP portfolio management.

The company was acquired by Smart & Biggar for $48 million on November 30, 2021. The acquisition was made at an EBITDA to revenue multiple of approximately 9x. For more information on how transaction structures impact seller liquidity, see Jahani and Associates’ article here. 

Media content protection software has broad applications in the marketing and entertainment industries. Technology has become more important for these sectors as they look to monetize their intellectual property while protecting their content. Strategic acquisitions of small and medium-sized firms are common, particularly among US- and European-based acquirers. 

Media content protection software companies should be mindful of exit opportunities. EBITDA multiple in the sector ranged between 9x and 25x in the period, with technology and intellectual property contributing significant increases in multiples. 

Sources: Pitchbook Data, Jahani and Associates (1), (2).

Manufacturing Execution Systems (MES) Capital Market Transactions

Between Q1 2020 and Q2 2024, $6.5 billion was deployed in the manufacturing execution systems sector (MES). MES software solutions are designed to manage, monitor, and execute manufacturing operations in real time. They track the entire production process, from raw materials to finished goods, ensuring efficiency, quality control, and regulatory compliance. By optimizing workflows and minimizing downtime, MES helps manufacturers improve product quality, reduce waste, and enhance overall productivity.

Most transactions conducted and capital invested were by US-based investors, with 88% of all capital invested. This shows an appetite to invest in advanced manufacturing technology as demand for onshoring and nearshoring production increases. Chinese investors conducted the second-highest transaction volume in the MES industry. The low average transaction size of under $7 million indicated the early stage nature of the sector in China and the demand for manufacturing innovation.

MES founders and shareholders should be aware of fundraising opportunities presented by US-based investors and possible exit opportunities.

• Between Q1 2020 and Q2 2024, $6.5 billion was deployed across 232 transactions in the MES sectors. The average transaction value was $28 million, highlighting the volume of transactions conducted in the middle and lower-middle markets.
• The most significant deployment of capital, $2.7 billion, occurred in Q4 of 2024 across 13 transactions with large private equitytransactions driving investment.
• The largest deal count occurred in Q2 2022 with 34 transactions. This may have been driven by the demand for manufacturing execution systems at the start of COVID-19 and the related lockdowns. The deal count in the remaining periods fluctuated between 8 and 20 transactions per quarter, indicating strong demand for investment in the sector.
• Two of the largest transactions conducted in the sector were completed by Aptean.com. Aptean raised $4.7 billion across two debt transactions closed on December 18, 2023, and January 29, 2024.

• Venture capital transactions saw a high level of transactions, accounting for 28% of deals in the sector. In the sector 65 venture capital transactions occurred, in which $195 million was deployed.
• Transactions by strategic acquirers were dominated by capital invested. Across 60 transactions, $2.5 billion was deployed. The average transaction size of $40 million indicates an appetite for transactions in the middle and lower-middle markets. 
• Private equity transactions accounted for 30% of capital deployed in the sector and 27% of the deal count. This shows the abundance of growth-stage companies in the manufacturing execution systems sector.
• PIPE, IPO, and other transactions accounted for a smaller portion of the capital raised, and the deal count indicated less mature companies in the sector.

• US-based investors dominated the capital invested in the manufacturing execution systems sector, with over 88% of capital deployed ($5.7 billion). US-based investors conducted a significant portion, 33% of transactions, with 77 complete and announced deals. This could be due to a variety of factors, including the demand for onshore or nearshore manufacturing facilities against the backdrop of rising geopolitical tensions and supply chain concerns. Similarly, the demand could be driven by the need to optimize and automate manufacturing processes in the US to remain cost-competitive with Asian markets.
• Chinese investors contributed $441 million across 65 transactions with an average deal size of under $7 million. This implies an abundance of smaller transactions indicating the early stage nature of the sector and the demand for manufacturing innovation.
• Investors in developed nations such as Canada, Germany, and Ireland contributed significantly to the deal count but deployed relatively less capital with no country investing more than $200 million. This shows the early stage nature of the sector outside of the US and the abundance of smaller transactions. 
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital invested. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of MES transactions, but each deal tends to be small, reflecting diverse capital market activities.

Deal Spotlight:

APPRENTICE

Apprentice is a Jersey City-based developer of a manufacturing execution system designed to serve the pharmaceutical industry. The company’s system integrates augmented reality, voice recognition, and artificial intelligence into wearable, mobile, and desktop devices. The lab execution system enables pharma to integrate the data and process to reduce human error and inefficiency in the drug production process.

The company raised $65 million of venture funding through a combination of debt and equity on March 9, 2023. Approximately $63 million of Series C1 was raised through equity sales at a pre-money valuation of $527 million. The round was led by ICONIQ Growth with participation from Insight Partners and Alkeon Capital Management. Approximately $2 million of the debt was provided by undisclosed lenders.

Capital invested in the MES sector is dominated by US-based investors. The demand for onshoring and nearshoring manufacturing is driven by supply chain concerns and rising geopolitical tension. Developed markets have similarly invested in the sector to remain competitive with Asian markets. Chinese investors have focused on early stage transactions, the nascent nature of the sector in China, and the demand for manufacturing innovation.

There is a relatively even distribution of deal count venture capital transactions, private equity transactions, and mergers and acquisitions. This showcases significant capital market opportunities available to MES companies at all stages of growth.

Provider-Driven Clinical Health Test Diagnostics and Analytics Capital Markets Activity

Between Q1 2020 and Q2 2024, over $240 billion was deployed globally, across 10,340 capital market transactions, in the clinical health test diagnostics sector with an average deal size of $24 million.

The clinical health test diagnostics and data analytics sector involves the assessment of an individual’s overall health through comprehensive biomarker and physiological data analysis. This sector integrates advanced testing methods and tools with sophisticated data analytics to provide personalized health insights. It emphasizes preventive care and personalized medicine, enabling healthcare providers and practitioners to optimize patient outcomes by addressing the root causes of health issues, often preemptively, through preventative screening.

Investing in the clinical health testing and diagnostics sector is attractive due to the increasing focus on preventative and personalized healthcare. Rising consumer awareness, technological advancements, and the expansion of personalized medicine are driving demand for omprehensive health insights. With strong market growth and global expansion opportunities, the sector offers diverse and scalable investment prospects,
making it a compelling choice for investors seeking to capitalize on the evolving healthcare landscape.

• Between Q1 2020 and Q2 2024, over $240 billion was deployed across 10,340 capital market transactions in the clinical health testing and diagnostics sector by global firms with an average deal size of $24 million.
• Q2 2021 reflects the period with the most significant deployment of capital, $24 billion, while Q2 2020 experienced the highest deal count, 847.
• Capital market activity in this space heightened during the Covid-19 pandemic due to the accelerated demand for and adoption of digital health technologies for testing and diagnostics.
• There is a consistent global demand for transactions in the clinical health testing and diagnostics sector with an average deal count per quarter of 574.
• The largest completed transaction was the 100% acquisition of San Diego, Californiabased Prometheus Biosciences by Merck & Co. for $10.8 billion on April 15, 2023.

• The United States is the leading destination for capital deployment in the clinical health testing and diagnostics industry, attracting 50% of the total global deal count (5,295 deals) and 71% ($177 billion) of the capital invested. This underscores the US as the primary market for both deal activity and significant capital inflows, reflecting its strong ecosystem and innovation in this sector.
• France and Germany have attracted substantial capital investments of $15 billion (224 deals) and $14 billion (262 deals), respectively. This indicates that these markets are receiving significant funding, likely directed towards larger, more established companies or advanced-stage projects, highlighting their importance in the European health tech landscape. 
• The United Kingdom has a high deal count of 817, reflecting a vibrant and active market. However, the capital invested totals $6 billion, suggesting that while there are numerous deals, they are generally of a smaller size compared to those in France, Germany, or the United States. This indicates a focus on early stage or smaller-scale ventures within the UK market.
• The “Other” category, accounting for 30% of the deal count and 11% of capital invested, suggests a broad distribution of investments across smaller countries or emerging markets. This indicates a high amount of global interest and the potential for significant developments in functional health testing and data analytics outside of the major markets.

• Merger and acquisition (M&A) deals lead the sector in terms of capital invested, with $69.7 billion invested across 538 deals. This indicates a strong trend of consolidation within the clinical health testing and diagnostics industry, where larger companies are acquiring smaller ones to gain a competitive edge or to expand their service offerings.
• Later-stage VC deals are the most frequent, with 1,753 deals accounting for $40.9 billion in capital invested. This high volume of VC activity suggests that the industry is attracting significant interest from investors looking to fund companies in their growth phases, aiming to capitalize on the sector’s potential.
• Buyout/LBO deals account for $33.81 billion across 234 deals, highlighting a strong interest in mature companies that are ready for strategic shifts or expansions. This, along with the significant amount of capital flowing into growth/expansion deals ($5.14 billion), underscores the attractiveness of established companies within this space for investors looking to capitalize on proven business models. 
• The presence of a wide range of deal types suggests a diversified investment approach within the industry. Each type of deal has attracted billions of dollars, indicating that companies in the functional health testing and data analytics sector have multiple avenues for raising capital.

Deal Spotlight:

CHEMBIO DIAGNOSTICS

Chembio Diagnostics, a Hauppauge, New York-based developer and manufacturer of rapid diagnostic tests, was acquired by Biosynex, a French market leader in the design and distribution of rapid tests, at a 27% share premium.

This acquisition unites two leading point-of-care diagnostics companies, each specializing in the development, manufacturing, and marketing of rapid tests for both practitioner and home use.

The acquisition broadens Biosynex’s global footprint while enhancing its European presence. The acquisition is expected to accelerate product innovation, leveraging the combined expertise of both companies.

Additionally, the consolidation of operations is anticipated to yield cost savings, synergies, and value creation by increasing manufacturing scale and reducing overhead costs, ultimately improving gross and operating margins.

The clinical health testing and diagnostics sector has experienced significant capital market activity, with over $240 billion deployed globally across more than 10,000 transactions between Q1 2020 and Q2 2024. The US leads the sector, attracting the majority of capital, while Europe and other regions also show strong investment interest. The wide range of deal types, from mature to early stage companies, underscores the sector’s diverse growth opportunities.

As demand for personalized and preventative healthcare continues to rise, this sector remains a highly attractive and scalable investment opportunity for those looking to capitalize on healthcare innovation and technological advancements.

Content Media and Animation M&A Transactions and Valuations

Between Q1 2020 and Q2 2024, $40 billion was deployed by acquirers in the content media and animation sectors. The sector includes all aspects of film and television, comic book creation and development, and subsectors like animation.  

The content media and animation sectors have experienced turbulent macroeconomic conditions caused by the global pandemic, widespread industry strikes, and lockdowns. Despite this, significant M&A activity has occurred. 

Most transactions conducted and capital invested in the content media and animation sectors were by US- and European-based acquirers. Additionally, strategic acquirers deployed over 73% of the transactions conducted. 

Content media and animation founders and shareholders should be aware of exit opportunities presented by strategic acquirers from the US and Europe. 

• The valuation multiples are based on a sample set of publicly listed podcasting and podcast advertising companies and M&A transactions in the sector. The data was collected on August 8, 2024.
• The sample set trades at an enterprise value to EBITDA multiple range of between 8x and 17x with an increase in average multiples as the enterprise value increases.
• Average enterprise value to revenue multiples ranged from 1x and 7x.

• The median transaction size has ranged significantly with peaks of over $200 million seen in Q4 2020, Q3 2021, and Q3 2023. This was driven by large transactions conducted by private equity firms.
• Q3 2020 to Q1 2021 saw the lowest median deal size of under $5 million, which is likely due to lockdown following the global pandemic and uncertainty regarding the entertainment sector.
• Since Q3 2022, the median transaction size has remained under 5 million, indicating an abundance of smaller transactions.

• Between Q1 2020 and Q2 2024, $40 billion was deployed across 325 film, television, comic book, and animation acquisitions. The average transaction value was $123 million, highlighting the volume of transactions in middle and upper-middle markets.
• The most significant deployment of capital, $17 billion, occurred in Q2 of 2021. Amazon’s acquisition of MGM Studios for $8.45 billion, completed on May 26, 2021, was the largest transaction in the sector.
• While the deal count shows variability, it remains above 10 per quarter. This consistency indicates a stable interest in deal-making, even as the investment amounts fluctuate. The largest deal count was in Q1 of 2022, with 30 transactions.

• Transactions by strategic acquirers in M&A transactions were dominated by deal count in the sector. They contributed 73% of all capital in the sectors while conducting 57% of all transactions. The average transaction size of $144 million highlights the appetite for larger acquisitions. 
• Buyouts and leverage buyouts accounted for $6 billion of capital invested across 90 M&A transactions in the content media and animation industries. The average transaction size of $68 billion indicates the appetite for private equity acquisitions in the lower middle market.
• Add-ons and other transactions accounted for less than 10% of capital deployed.

• US-based acquirers dominated the capital invested in the content media and animation sectors, with over $23 billion across 109 transactions in the category. This could be due to a variety of factors, including the historical dominance of the Hollywood film industry and the abundance of small companies in the sector. 
• European acquirers conducted the largest number of transactions in the sector, 119, but contributed less than half of the capital deployed than US-based, $11 billion. The significant deal count indicates an appetite for smaller content media and animation acquisitions and the abundance of smaller and independent companies in the industry.
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital deployed. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of content media and animation transactions, but each deal tends to be small, reflecting diverse capital market activities.

Deal Spotlight:

WOW! Unlimited Media

Wow! Unlimited Media Inc. is a Canadian animation company producing content for international audiences on global media platforms. The company operates in the animation production and networks sectors and derives the majority of its revenue from the US. 

The company was acquired by Genius Brand International for $65.8 million on November 20, 2021. Intellectual property formed a key part of the acquisition rationale and was likely an important aspect of the enterprise value. For more information on how transaction structures impact seller liquidity, see Jahani and Associates’ article here.

Content media and animation companies have endured challenging macroeconomic conditions. The sector is dominated by large acquisitions by US-based strategic acquirers and smaller transactions conducted by European acquirers.  

Content media and animation companies should be mindful of exit opportunities. EBITDA multiple in the sector ranged between 8x and 17x in the period with technology and intellectual property contributing significant increases in multiples.

Sources: Pitchbook Data, Jahani and Associates (1), (2).

Healthcare Therapy Transactions and Valuations

Between Q1 2020 and Q2 2024, over $32 billion was deployed across 1,127 M&A transactions in the healthcare therapy sector by global firms, with an average deal size of $28 million.

The healthcare therapy industry, a key segment of the broader healthcare sector, includes physical, occupational, and speech therapy services delivered in settings such as homes, clinics, and private facilities. Future growth is driven by an aging population, increasing demand for therapy to address age-related conditions, and the rising prevalence of chronic diseases requiring ongoing therapeutic care.

Technological advancements, such as wearable devices, and policy changes promoting value-based care will enhance service effectiveness and accessibility. Public awareness and workforce expansion will also support industry growth.

• The valuation multiples are based on a sample set of private M&A transactions and publicly listed healthcare therapy companies in the sector. The data was collected on August 7, 2024.
• The sample set typically trades at an enterprise value to revenue multiple range between 1x and 5x, staying consistent in this range as the enterprise value of the business increases.
• Enterprise value to EBITDA multiples varied significantly, typically ranging between 10x and 20x. This valuation increased significantly for businesses valued at $100 million or more in enterprise value.

• Between Q1 2020 and Q2 2024, over $32 billion was deployed across 1,127 M&A transactions in the healthcare therapy sector by global firms, with an average deal size of $28 million.
• Q1 2023 reflects the period with the most significant deployment of capital, $6 billion, while Q4 2021 experienced the highest deal count, 96.
• The average deal count has fluctuated significantly but has consistently remained at over 20 deals per quarter. The average deal count per quarter was 63 deals.
• This high average deal count indicates that there is a consistent global demand for M&A transactions in this industry.
• The largest completed transaction was the 60% acquisition of CenterWell Home Health by Humana for an estimated $3.6 billion on August 17, 2021.

• The United States dominated the space in terms of capital investment and deal count, receiving $20 billion in capital investment with a deal count accounting for 81% (902 deals) of the total M&A transactions. This dominance is due to the large size and maturity of the US healthcare market, which offers greater opportunities for consolidation and investment.
• The United Kingdom and Germany follow the US in terms of capital investment, receiving 9% ($2.2 billion) and 5% ($1.2 billion) of the total capital, respectively. In deal count, Germany has 35 deals, while the UK has 22 deals. These countries have robust healthcare systems and strong investor interest, particularly in innovative healthcare solutions and technologies.
• Australia and Canada have seen moderate activity, with Australia receiving $850 million and Canada $456 million in capital investment, accounting for 20 and 27 deals, respectively. Other countries collectively account for 10% of the total deal count and $757.28 million in capital investment.

• M&A transactions represent the largest share of capital invested ($19.5 billion) and have a significant deal count (489 deals). This indicates a strong preference for traditional mergers and acquisitions as a strategic growth and consolidation tool in the healthcare therapy sector. 
• Buyout/leveraged buyout (LBO) deals are the most numerous, with 623 deals, and substantial capital investment ($4.3 billion). This reflects the popularity of buyouts as a method for private equity firms to acquire and restructure companies for potential growth.
• Add-on transactions are also prevalent, with 509 deals and $1.9 billion invested. This suggests that companies are actively seeking to expand their existing operations by acquiring smaller firms to enhance their service offerings or geographic reach.
• The average deal size was the largest for public to private transactions at $211 million per transaction. This is due to the nature of publicly listed companies being mature with a high enterprise value. Reverse mergers and M&A had the second and third highest average transaction size at $90 million and $40 million, respectively. 

Deal Spotlight:

Taib Medical Company

Taib Medical Company, established in 2018 and based in Riyadh, Saudi Arabia, focuses on providing home medical care services. Their offerings include home physical therapy, nursing, vaccinations, virus testing, and home radiology. They cater to individuals and organizations, aiming to deliver high-quality, connected healthcare services. 

The company was acquired by Blominvest Saudi Arabia for $20 million through a leveraged buyout. At the time of the acquisition, Taib Medical Company had a revenue of approximately $6 million with an EBITDA of over $2 million. The enterprise value to revenue and enterprise value to EBITDA multiples were 3.5x and 9.3x respectively.

The healthcare therapy sector has seen substantial investment and consolidation, with over $32 billion deployed across 1127 M&A transactions from Q1 2020 to Q2 2024. The industry’s growth is driven by an aging population, rising chronic diseases, and technological advancements. The US leads in deal count and investment, followed by the UK and Germany. Valuation multiples for M&A transactions highlight an attractive market with consistent demand driven by high valuation multiples indicating the anticipated growth potential and demand for consolidation in the industry. This dynamic environment underscores the sector’s critical role in enhancing patient care and its potential for continued expansion and innovation.

Sources: Kroll Healthcare Sector M&A Industry Insights Fall 2023 Executive Summary, 2023 Healthcare M&A Report – VMG Health, Behavioral Healthcare Services M&A Update – Capstone Partners, Opportunities Abound Even as Risks Rise: Q3’22 M&A Trends In Healthcare – KPMG, 2022 Global Healthcare Sector Outlook – Deloitte, Healthcare Transactions Update – JTaylor, Healthcare M&A And Investment Trends: Opportunities & Challenges – Stax, Healthcare M&A Weekly – Tripletree, 2023 Healthcare M&A Report – Healthcare Appraisers

Automotive Dealership Technology

Between Q1 2020 and Q2 2024, over $24 billion was deployed in the automotive dealership technology sector. During that period, 445 capital market transactions were conducted with an average deal size of $54 million. There is a consistent global demand for automotive dealership technology, highlighted by an average of 25 transactions occurring per quarter.

Automotive dealership technology refers to enterprise software solutions that streamline and enhance the operations of car dealerships. This technology includes dealer management systems (DMS) for integrating sales, inventory, and service functions; customer relationship management (CRM) software designed specifically for the industry; inventory management systems; sales and finance tools; service management solutions; and digital marketing platforms.

Improved data management and workflows better integrate sales, inventory, customer relationship management, and servicing solutions. They also improve customer experiences by enabling personalized interactions and faster service, enhancing customer satisfaction and loyalty. Furthermore, advanced analytics and reporting tools provide dealerships with valuable performance insights, helping them make informed decisions and optimize strategies. In a competitive market, these technologies are essential for dealerships to remain agile, responsive, and successful.

Investing in automotive dealership technology is attractive due to the sector’s growing demand and potential for innovation. As dealerships seek to enhance efficiency, customer experience, and profitability, the need for advanced software solutions is increasing. With continuous advancements in AI, analytics, and digital marketing, this sector offers significant growth opportunities. Moreover, the trend towards digitalization in the automotive industry makes this space attractive for investors, with potentially strong returns and long-term value.

• Between Q1 2020 and Q2 2024, over $24 billion was deployed across 445 capital market transactions in the automotive dealership technology sector by global firms with an average deal size of $54 million.
• Q3 2022 reflects the period with the most significant deployment of capital, $8.4 billion, while Q2 2020 experienced the highest deal count, 45.
• The Q2 2024 data reflects a recent increase in activity in the automotive dealership technology sector with 25 deals and over $5 billion of capital invested.
• The average deal count was 25 deals per quarter. This remained steady, even through the pandemic, highlighting the consistent interest and demand in the sector.
• The largest completed transaction was the acquisition of CDK Global by Brookfield Business Partners and the Investment Management Corporation of Ontario, through an $8.3 billion leveraged buyout on July 6, 2022.  

• Buyout and leveraged buyout transactions were the most significant type of transaction leading in both capital invested ($10.3 billion) and deal count (63 deals).
• The consolidation in the automotive dealership technology sector, indicated by the dominance of buyouts and leveraged buyouts, suggests a trend toward industry concentration. This can lead to fewer but larger players with increased market power, potentially enhancing operational efficiencies, driving technological innovation, and shaping competitive dynamics.
• Public to private transactions were the largest on average, with an average deal size of $1.7 billion. Buyouts and leveraged buyouts had the second largest average deal size with an average deal size of $164 million.
• Both later-stage VC and early stage VC transactions are prominent, with substantial activity in terms of deal count and capital invested. Later-stage VC transactions experienced 51 deals totaling $2 billion in capital investment, while early stage VC transactions comprised 59 deals amounting to a total capital invested of $392 million. This highlights strong venture capital involvement in the sector, supporting growth at various company stages.
• The add-on and merger/acquisition categories show steady activity, with 52 and 62 deals respectively, and significant capital investments. This further indicates ongoing consolidation and strategic growth in the sector.

• The United States led significantly in both deal count (192 deals) and capital invested ($18.6 billion). This indicates a strong appeal and significant market activity in the automotive dealership technology sector in the US.
• The United Kingdom ranks second in capital invested ($3 billion) but has a smaller deal count share (35 deals). This suggests that while there may be fewer deals, they tend to be larger compared to other countries.
• Countries like Germany (39 deals, $937 million capital invested), China (39 deals, $482 million capital invested), and Canada (26 deals, $593 million capital invested) show meaningful involvement, highlighting the global interest in investment in this sector.
• The distribution of capital invested is more concentrated than the distribution of deal counts, with the top few countries (primarily the US and the UK) deploying the majority of investment capital. This suggests a focus on high-value transactions in these key markets.

Deal Spotlight:

VINN Automotive Technologies

VINN Automotive Technologies is a developer of a sales integration platform designed to help dealerships streamline their sales processes. The company’s platform provides lead generation services to dealers, concierge service to customers, and e-commerce capabilities for dealers’ websites, enabling customers to perform seamless digital transactions and offer them a one-stop shopping experience.

The company raised $15.5 million of Series A venture funding in a deal led by Inovia Capital on February 01, 2022. Roach Capital, The Gramercy Fund, WndrCo, Garage Capital, Haro Ventures, Tiny Capital, Cindicates, and Alexis Ohanian also participated in the round. This was the third round of successful funding for the firm since October 2019, having done seed and pre-seed funding prior. 

VINN Automotive Technologies was later acquired in June 2023, by Quorum Information Technologies.

The automotive dealership technology sector has seen over $24 billion invested across 445 transactions from Q1 2020 to Q2 2024, averaging $54 million per deal. Dominated by buyouts and VC investments, the sector remains active amid market fluctuations.

With the US leading in capital deployment, the sector’s growth is driven by technological advancements in AI, analytics, and digital solutions. The increasing demand for efficient, customer-centric dealership operations makes this an appealing area for future investments and innovations.

Sources: 2024 Automotive Trends – Mercer Capital, 2024 Cox Automotive Market Insights and Outlook, Cox Automotive’s Power of Data Study, M&A in Automotive and Mobility: Deals to Secure a Place in the Industry’s Future, Pitchbook Data.

Podcast Advertising and Sports Podcast Advertising M&A Transactions and Valuations

Between Q1 2020 and Q2 2024, $9 billion was deployed by acquirers in sports podcasting and sports podcast advertising. Podcasting involves the creation of audio files that are available to listeners online through a computer or, more commonly, a mobile device. 

Podcasting is one of the most popular forms of digital media and is an increasingly common way for people to consume news and sports content. Over 70 million Americans report listening to podcasts at least once a month and 22% of US sports fans say they listen to sports podcasts weekly. 

Most transactions conducted and capital invested in the sports podcast and sports podcasts advertising sector were by US- and European-based acquirers. Additionally, strategic acquirers deployed over 79% of the transactions conducted. The median deal size has decreased significantly, indicating demand for smaller transactions. 

Sports podcasting and sports podcast advertising shareholders should be aware of exit opportunities presented by strategic acquirers from the US and Europe. 

• The valuation multiples are based on a sample set of publicly listed podcasting and podcast advertising companies, as well as M&A transactions in the sector. The data was collected on August 1, 2024.
• The sample set trades at an enterprise value to EBITDA multiple range of between 10x and 22x with an increase in average multiples as the enterprise value increases.
• Average enterprise value to revenue multiples ranged from 1x and 4x.   

• The median transaction size has ranged significantly with a peak in Q3 2021 of over $130 million. This was driven by large transactions conducted by private equity firms. 
• Q3 2020 to Q2 2021 saw a significant median transaction size that ranges between $16 million and $25 million. 
• Since Q3 2022, the median transaction size has remained under $5 million, indicating an abundance of smaller transactions. 

• Between Q1 2020 and Q2 2024, $9 billion was deployed across 480 podcasting and podcasting advertising acquisitions. The average transaction value was $19 million, highlighting the volume of transactions in middle and lower-middle markets.  
• The most significant deployment of capital, $1.8 billion, occurred in Q3 of 2020 with the largest deal count in Q3 of 2023, 36 transactions. 
• While the deal count shows variability, it remains above 20 per quarter, except for the drop in Q2 of 2024 and Q1 and Q2 of 2020. This consistency indicates a stable interest in deal-making, even as the investment amounts fluctuate.
• PENN Entertainment’s acquisition of Barstool Sports for $388 million, completed on February 17, 2023, was one of the largest and most publicized transactions in the sector. Barstool Sports was then acquired by the former CEO David Portnoy on August 8, 2023, for an undisclosed amount.

• Transactions by strategic acquirers in M&A transactions were dominated by deal count in the sector. They contributed 79% of all capital in the sectors while conducting 52% of all capital invested. This highlights the appetite for smaller acquisitions. 
• Large strategic acquirers in the sports podcasting and sports podcast advertising sector include Amazon, SiriusXM, and PENN Entertainment. 
• Private equity firms and other financial acquirers conducted 21% of M&A transactions and contributed 52% of capital deployed in the sector, indicating demand for larger acquisitions.

• US-based acquirers dominated the capital invested in sports podcasting and sports podcast advertising, with over $5 billion across 52% of the deals in the category. This could be due to a variety of factors, including the popularity of sports podcasts, the abundance of established podcasts, and the demand by media companies and advertisers to reach new audiences and select demographics.  
• European acquirers contributed 31% of all M&A transactions and 33% of capital invested. Western Europe, particularly the United Kingdom, Ireland, and Germany contributed the majority of capital invested in the sector. The significant amount of capital invested and high deal count indicate an appetite for sports podcasting and sports podcast advertising transactions as the sector develops in Europe. 
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital invested. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of sports podcasting and sports podcast advertising transactions, but each deal tends to be small, reflecting diverse capital market activities.

Deal Spotlight:

PODZ

Podz is a New York City-based podcast platform designed to create an audio news feed and disrupt traditional media in the news and sports sectors. The company’s platform identifies selective mini-clips of podcast episodes and delivers them to listeners in a personalized feed, allowing users to control their media consumption.

The acquisition was valued at €45 million on close, with a further €9 million in contingency payments based on achieving specified milestones. For more information on how transaction structures impact seller liquidity, see Jahani and Associates’ article here. 

Podcasts are reaching an increasing percentage of the population and are growing in importance. Since 2023, significant M&A activity has occurred without a large amount of capital deployed. This shows the occurrence of smaller transactions within the sector. 

Founders and shareholders of sports podcasting and sports podcast advertising companies should be mindful of exit opportunities. The median transaction size is low and the EBITDA multiple ranges between 10x and 22x. The most active acquirers in the sector are strategic acquirers who contribute the majority of capital and deal flow and are mostly based in the US and Europe.

Sources: Pitchbook Data, Jahani and Associates (1), (2), Demand Sage.