Private Equity-Backed Telecoms & Media Deals

The telecoms & media sector is comprised of companies operating in the telecoms, communications, media, advertising and digital media sectors. Data from Preqin shows that this sector has witnessed over 850 buyouts globally since 2006, representing an aggregate deal flow of over $250bn during this period.

Number and Aggregate Value of Private Equity-Backed Telecoms & Media Buyouts Globally:
H1 2006 - H2 2012 YTD (as of 15-Aug-2012)

Deal activity in telecoms & media was strongest during H2 2006 – H1 2007, at the height of the buyout boom era, with 70 telecoms & media deals valued at $63.1bn in H2 2006, followed by $65.9bn worth of deals in H1 2007.  Following this peak, deal flow in the telecoms & media space mirrored the wider buyout sector by witnessing a marked fall in activity due to the onset of the global financial crisis in 2008. The sector reached a low of 37 deals valued at $1.4bn in H1 2009, a huge decline from the levels of telecoms & media deals witnessed two years earlier.

Number of Private Equity-Backed Telecoms & Media Deals by Region:
2006 - 2012 YTD (as of 15-Aug-2012)

In the months following this decline, deal flow in the telecoms & media sector increased to above $3bn in deals in H2 2009 and H1 2010, before surging during the second half of 2010 and reaching a post-Lehman peak of 71 deals valued at $14.7bn. These elevated levels of telecoms & media deals continued in H1 2011 before witnessing a gradual slow-down in activity in the following months, reaching 68 deals valued at $6.7bn in H1 2012, almost half the value of deals announced during the post-Lehman high of H1 2010. As of 15 August 2012, 23 telecoms & media deals valued at $4.6bn have been announced.

Breakdown of Private Equity-Backed Telecoms & Media Deals by Region:
2006 - 2012 YTD (as of 15-Aug-2012)

Aggregate Vaue ($bn) of Private Equity-Backed Telecoms & Media Deals by Region:
2006 - 2012 YTD (as of 15-Aug-2012)

When assessing deal flow by region, North America is the most prominent area of activity for telecoms & media deals, with over 50% of the sector’s deals based in the region in recent years. During 2012 to date, as of the 15t August, there have been 50 telecoms & media deals in North America valued at $8bn, representing 55% of all deals globally. Europe is the second most prominent area for telecoms & media deal activity, with over a third of all deals since 2006 taking place in the region.

Breakdown of Private Equity-Backed Telecoms & Media Deals by Type:
 2012 YTD (as of 15-Aug-2012)

In 2008, Europe represented 39% of all telecoms & media deals; however, this proportion has slowly decreased in recent years, with 33% of all telecoms & media deals in 2012 to date accounted for by Europe-based deals, the lowest proportion for the region in the past six years. Asia and Rest of World-based deals account for 12% of global deals in 2012 to date. In the years following the financial crisis, this proportion spiked, with 18% of all telecoms & media deals in 2009 occurring in the Asia and Rest of World region, before decreasing slightly in subsequent years. Of the 92 telecoms & media deals announced in 2012 to date, leveraged buyouts are the most prominent, representing 37% of the number and 67% of the aggregate value of these announced deals. Add-ons account for 42% of deals, a clear indication of fund managers’ desire to bolt-on companies to their current holdings in order to strengthen and add value to their portfolio companies. Thirteen percent of all telecoms & media deals in 2012 to date have been growth capital injections, while 8% of the number and value of deals have been public-to-private acquisitions. The largest telecoms & media deal in 2012 to date is the recently announced $3.3bn acquisition of Getty Images by the Carlyle Group from Hellman & Friedman. The deal will give the Carlyle Group a controlling interest in the firm, while Getty Images co-founder and chairman Mark Getty and the Getty family will roll substantially all of their ownership interests into the transaction.

10 Largest Telecoms & Media Buyouts Globally by Deal Size:
2012 YTD (as of 15-Aug-2012)