Press Room
Media and communications companies can expect more private
equity backing in 2010 says Grant Thornton report
Despite being the least active sector for private equity in the
last 12 months, media & communications companies can
expect substantially more backing from institutional investors in
2010, says a survey from accountants and business advisers, Grant
Thornton UK LLP.
According to the firm's Private Equity Barometer, a quarterly
survey of more than 100 private equity executives, 15% of private
equity firms ranked media and communications among the top three
sectors they anticipated being most active in over the next 12
months. In contrast, of the 100 private equity executives surveyed,
no respondents had selected the media & communications sector
as being one in which they were most active in over the previous 12
months.
The media & communications sector had the third highest
average Price Earnings (P/E) ratio (6.75) over the last 12 months
trailing Healthcare (7.63), ranked the highest followed by
Technology (7.00), according to the survey. Despite an
expected decrease in P/E ratios in all sectors next year, media
& communications ranked highly (4th place) with a P/E
ratio of 6.38. This is behind healthcare (7.33) technology (6.86),
and financial services (6.43). Healthcare, with a response rate of
55%, is the most popular sector for expected private equity
activity next year and is one which saw the most activity in the
previous 12 months (47%).
Mark Henshaw, Head of Media and Entertainment at Grant Thornton
says: "As the least popular sector in the survey over the previous
12 months, it is encouraging to see that a growing number of
private equity executives are turning to media & communications
companies as a viable option for backing. They 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.
"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. It is also reassuring to see that the sector has one of the
highest actual and expected P/E ratios. This can only add to
optimistic signs of an upturn in the industry."