PE Investors In UK Media Are Ready To Do Deals In 2010

UK media deals may have plummeted by 85 percent as liquidity dried up 2008 (PwC), but things are looking up…

Accountancy firm Grant Thornton’s Private Equity Barometer survey of more than 100 PE execs shows that 15 percent of PE firms say media-and-communications is one the top three sectors they are targeting for activity next year. That’s heartening since, last year, no execs gave that verdict.

Grant Thornton’s media and entertainment head Mark Henshaw, in the release: “There is a sense of confidence that media and communications businesses are beginning to bounce-back from the market downturn and may therefore increasingly attract the attention of private equity, particularly in the fragmented digital marketing sector.

“(PE bosses) are also beginning to view the media sector as a feasible choice to support buy and build strategies, despite all the rumblings in the summer about restructurings and re-financing.”

Henshaw’s survey ranks the media-and-comms sector favourably on price-to-earnings ratio (ie. price paid per share versus earnings per share), though less so next year due to an expected industry-wide P/E dip…

— 2009: 1. Healthcare (7.63), 2. Technology (7), 3. Media-and-comms (6.75)
— 2010: 1. Healthcare (7.33), 2. Technology (6.86), 3. Financial services (6.43), 4. Media-and-comms (6.38)