Crystal ball readers at Ernst & Young’s Transaction Advisory Services say that as many as 33% of global players may be looking at strengthening their company via the merger and acquisition route during the coming year.
E&Y’s Pip McCrostie said, “In the coming months, there is likely to be an increase in M&A activity as companies dispose non-core, underperforming or distressed assets. Those in a position to buy will have the opportunity to capture market share and grow revenues in ways that were impossible two years ago.”
“Companies are looking for ways to drive revenue growth through M&A,” added Rich Jeanneret. “Valuations are lower than they have been for many years, providing potential opportunities for well-capitalized companies to expand or redefine their businesses, increase their market share, or enter new markets.”
RBR-TVBR observation: Somehow we don’t think US broadcasting companies are going to be a big factor in that 33% group of active buyers. It certainly isn’t for a lack of properties to buy – many companies would love to do some portfolio pruning, and the bankers at the reins of many others would love to sell them off intact.
However, we think the financial community has gotten wise to the fact that the only people capable of effectively running broadcast station groups are broadcasters; financial types have neither the patience nor the expertise to do it right. So there will likely be no reruns of deals like Clear Channel going to private equity partners.
Meanwhile, the broadcasters who could be taking advantage of the situation to make strategic acquisitions simply do not have the money, nor can they find anybody willing to take a chance on loaning it to them.
So Ernst & Young can enjoy a front row M&A seat throughout 2010; there just doesn’t figure to be very much US broadcasting involved.