Mergers and acquisitions and investment activity in the Interactive Advertising segment fell in 2Q10 compared to the prior quarter. During this period, Petsky Prunier recorded 49 transactions, including 31 acquisitions and 18 investments, compared to 56 transactions in 1Q10. Aggregate transaction value declined 16 percent to approximately $1.3 billion. The largest transaction in the segment was Hearst Communications’ acquisition of iCrossing, a digital marketing agency specializing in search engine marketing and optimization, for a reported $325 million.
ACTIVE SUBSEGMENTS The most active subsegment was Interactive Agency, with 13 transactions for a total of approximately $573 million. The majority of the transaction activity in this subsegment was driven by strategic buyers. Transactions included Hearst’s acquisition of iCrossing, Web.com’s acquisition of Register.com, Austin Ventures’ acquisition of Exopolis, WPP’s acquisitions of Midia Digital and i-Cherry, both in Brazil, Delivery Agent’s purchase of interactive media agency The Band and LoopNet’s acquisition of Reaction Web.
Online lead gen company Bankrate.com reportedly agreed to acquire NetQuote and CreditCards.com for $205 million and $145 million, respectively, to strengthen its reach in the insurance and credit card lead gen verticals. Eleven transactions were announced in the Ad Networks/Exchanges subsegment totaling approximately $72 million.
Venture and growth capital investors continued to pace Digital Video industry transactions. Recipients of growth capital included Tremor Media ($40 million), Brightcove ($12 million), Blip Networks ($10.1 million) and Transpera ($9 million).
BUYERS Strategic buyers announced 27 transactions for more than $1 billion and accounted for the majority of transaction activity. Excluding the $325 million iCrossing deal, the remaining 26 transactions were valued at approximately $723 million. Venture and growth capital investment totaled $214 million in 18 companies, down from $264 million in 20 businesses last quarter. In addition to Austin Ventures’ acquisition of Exopolis, other buyouts included Riverside Company’s acquisition of email service provider Mansell Group and Great Hill Partners’ acquisition of Educaedu S.L., a Spanish education-focused online lead generation company.
TRANSACTIONS Other transactions in the Interactive Advertising segment included Providence Equity Partners’ acquisition of a 25 percent stake in Cox Auto Trader, one of the largest automotive shopping and advertising websites, EducationDynamics’ acquisition of Education Connections – an education-focused online lead generation company – from Kaplan, Beyond Commerce’s acquisition of WebYES! and AdKnowledge’s acquisition of Hydra Group, which was advised by Petsky Prunier. Among investments, Reply.com raised $15 million from Hercules Technology Growth Capital, Martini Media Network raised $6 million from Reed Elsevier Ventures and AdReady raised $5.3 million from Madrona Venture Group.