Private-equity funds dominate marcomms M&A
These 41 deals represent a dramatic increase in private-equity backing within this sector.
With the number of management and IT consultancies following Accenture's lead on the rise, the M&A market is particularly vibrant, she added.
"Every quarter we see a new consultancy group entering the marcoms market. In Q1 Capgemini made its second major move into the space in acquiring LiquidHub, following on from its acquisition of Lyons Consulting Group last year," Langley said.
Over the quarter, full-service digital agencies remained the most active subsector of marcoms with 28 deals, representing 15% of the overall market.
"Digital and digital transformation remain the areas that buyers tell us are their priority, but if you look at the deal activity we continue to see strong appetite for good businesses across the spectrum of marketing services. Interest ranges from more traditional areas such as events, OOH and offline media-buying right through to technology-led agencies with capabilities in areas such as Salesforce and Adobe," Langley said.
The research also found that 26% of deals were cross-border in Q1. Volumes of transactions involving UK targets were broadly static, suggesting Brexit is still not really putting acquirers off, but deals in Western Europe slipped slightly to 19% of overall volumes, down from a quarter of activity in Q4 2017.
This slight fall in deal activity involving Western Europe is "just a blip", Langley noted. "There is still huge demand for scaled targets in the main European markets of Germany, the Nordics and France and we are confident that by the year-end the proportion of deal activity involving Western European targets will be back up to where it was in 2017."
Further, M&A activity within this sector is not driven purely by PE and the consultancies as within this first quarter, buyers ranged from business intelligence company Informa, to Salesforce and entrepreneur network Endeavour.
"With this level of demand the M&A market remains very buoyant," Langley concluded.