The Jordan Edmiston group is one of the main media and advertising technology investment banks. As such the New York based group, led by its Founder & CEO Wilma Jordan, gets many insights into trends and growth opportunities. We interviewed Jordan about the latest transactions she has worked on and about her evaluation of the M&A scene.
Portada: You recently advised the Jun Group on its US $28 Million funding by Halyard Capital, a former investor in impreMedia and the Bridge Bank. Jun Group is active in the mobile video and branded content space. How do you see mobile video and branded content growing? What was the specific rationale of the investors?
Wilma Jordan, Founder & CEO of The Jordan, Edmiston Group: “We see strong growth ahead for mobile video and branded content. Jun Group has experienced 90% annualized growth over the last two years. Its ad platform aggregates audiences directly from mobile applications, which comprise over 87% of smartphone usage. Additionally, the Company’s technology uses first-party data to deliver precise, customized targeting for video and branded content. The one-two punch of scale and targeting, combined with the security of an open, honest delivery system has set Jun Group apart and positioned the company to continue its outstanding growth.According to eMarketer, mobile will account for 72% of U.S. digital ad spend by 2019. The IAB said that mobile advertising grew 76% year-over-year, from 2013 to 2014, making it the industry’s biggest growth segment. Halyard Capital is investing directly into the dramatic growth of mobile advertising and is excited to partner with a leading firm in this space, like Jun Group. Halyard believes there is an opportunity for Jun Group to succeed as brands shift video dollars away from television into effective, measurable channels like mobile applications.”
Portada: Content Marketing has grown and continues to grow tremendously. Do you think that at some point there is going to be a backlash:e.g. audiences will be more reticent to Advertiser sponsored content and go back to a more traditional Church/State separation between Advertising and Editorial Content?
Wilma Jordan: “As long as content is noted as being advertiser created/sponsored, then audiences will continue to value this content and consume it. Content marketing will continue to grow, as brands benefit reaching their customers directly with an unfiltered message. And, consumers appreciate being able to communicate directly with brands, especially through social and mobile channels. Native ad spend is forecast to grow at a 34% compound annual growth rate (CAGR) from 2012 to 2018, according to eMarketer. With ever-evolving technologies like beacons and smart devices in the home, content marketing will continue to play a big role in the future of online advertising.”
Portada: You see many media entrepreneurs, What do you think are the main feature of a successful media entrepreneur in the current Media/Tech environment?
Wilma Jordan: “While today’s entrepreneurs need to be tech-savvy and focused on new channels for delivering content and driving customer engagement, they also need to be grounded in core leadership principles, enabling them to continuously transform and evolve their organizations and drive performance and growth. Today’s leaders must be well-rounded and able to work collaboratively with a diverse set of constituencies, from the clients to the management team to the board/investors to the employees.”
Portada: You recently advised Time Inc in its acquisition of brand communications agency InvnT. HHow do you see print centric companies like Time Inc obtaining higher growth rates through M&A?
Wilma Jordan: “Print-centric companies need to continue transforming their product mix to include a wider array of channels to reach their customer bases. This would include digital, mobile, video and face-to-face and can be done organically and through M&A. Led by Chairman & CEO Joe Ripp, Time Inc. has been at the forefront of this evolution, and the results show in the company’s latest quarterly results, which outpaced analyst and market expectations. Time Inc.’s acquisition of inVNT is part of its evolution, where the company is adding live/face-to-face media assets to help create meaningful and memorable interactive brand experiences for the iconic labels under its umbrella. As stated by Mr. Ripp, “inVNT provides proven event expertise that will make our company a more attractive strategic partner for global advertisers. This acquisition complements our traditional and digital advertising assets, and I see enormous potential to grow this business.”
Portada: How do you evaluate the current M&A climate?
a) In the traditional media sector
Wilma Jordan: “M&A continues to be active in both B2B and B2C traditional media, as there are large and active players in both of these markets that continue to consolidate the marketplace. This is illustrated by a few significant transactions during the first half of 2015 across both B2B and B2C. In the B2B media sector, JEGI recently represented Dodge Data & Analytics (a Symphony Technology Group portfolio company) on the sale of its industry-leading construction and architecture brands Engineering News-Record (ENR), Architectural Record, and SNAP to BNP Media. Earlier this year, JEGI advised Summit Professional Networks, a leading information and marketing platform serving the insurance, financial and legal markets, on its sale to ALM. Another large more traditional B2B media transaction from 2015 is MacMillan Science and Education’s acquisition of academic publisher Springer Science+Business Media from BC Partners. Consumer media also saw some significant M&A transactions in H1 2015, including: Sequential Brands’ acquisition of lifestyle content provider Martha Stewart Living Omnimedia for $353 million; Tribune Publishing Company’s acquisition of local news and information provider San Diego Union-Tribune for $85 million; and Meredith’s acquisition of fitness magazine SHAPE from Weider Publications for $60 million.”
b) Advertising Technology
Wilma Jordan: “Ad tech M&A continues to be active driven by PE investment, new strategic market entrants and established players consolidating the market. In the first half of 2015, we saw several large M&A transactions in the sector, including: Vista Equity’s announced acquisition of a majority stake in Mediaocean, valuing the company at a reported $720 million; Nielsen’s acquisition of eXelate for a reported $200 million; AppNexus’ acquisition of Yieldex for a reported $100 million; and Vector Capital’s acquisition of Triton Digital for an undisclosed amount.”
c) Other verticals Jegi works in.
Wilma Jordan: “Overall, M&A in the media, information, marketing, software and tech-enabled services sectors saw robust activity through the first half of 2015, with 1,125 transactions announced at a total value of $53.7 billion. Deal activity and value sustained the brisk levels of 2014, which saw 1,078 deals at a similar dollar value in the comparable period. Software & Tech-Enabled Services led all sectors in number and value of transactions, with 708 deals valued at $28.4 billion for the first half of the year. Application software was the most active sub-sector, accounting for one-third of deal volume. IT services and distribution (18%) was the second most active sub-sector, followed by mobility (11%), IT outsourcing (9%) and information management (8%).
Marketing Services & Technology was the second most active sector, with 278 transactions worth $12.7 billion in H1 2015. Just over half of sector transactions occurred in the traditional agency, digital agency and marketing technology sub-sectors. However, marketing technology was the leader by far in deal value. Data & analytics also accounted for a substantial amount of deal value through the first half of 2015, with a handful of large transactions. M&A activity in the U.S. continues at a strong pace, due largely to positive economic trends and rising confidence in the corporate sector. Companies are flush with cash and robust debt markets continue to offer historically low interest rates. JEGI continues to be very active on the deal front, with 13 closings announced YTD and several deal announcements expected in the coming weeks.”