December 2022 proved to be a strong end to a busy year of M&A activity, with 64 deals executed, bringing the total number of transactions across marketing services to 834.
Of the 64 deals, 45 were completed by strategic acquirers, six transactions were made through direct private equity investment and 13 deals were done by private equity-backed strategics.
In line with regular trends, North America was the most active region with 26 companies acquired – eight deals related to UK assets. We have recorded 13 transactions in Western Europe as activity in the region remains strong.
Deals of note in the month included:
- Accenture acquired Australian customer insights, strategy and CX agency Fiftyfive5 to build capability and innovation across Australia and New Zealand. Following several busy M&A years, Accenture’s activity has slowed a little as it looks to add specific capabilities and geographies to its wide agency roster consolidated under Accenture Song.
- Carlyle-backed Dept acquired US business-to-consumer and business-to-business commerce agency and Salesforce specialist Melon. Melon has offices in Chicago, Atlanta and Argentina, and this acquisition almost doubles the Salesforce service line offering in the wider group.
- US consulting group Protiviti acquired US digital transformation and CX agency R2integrated, adding end-to-end digital integrated services and Adobe expertise.
- There was further activity in the B2B space as BC Partners acquired leading US account-based marketing agency Madison Logic, representing a successful exit for Clarion Capital Partners. We expect to see a busy B2B M&A environment throughout the coming year.
The annual total of 834 deals represents a 10% uplift on 2021. There has been continued strong appetite from both strategic buyers and private equity investors against the backdrop of a cautious debt environment.
As market conditions continue to bring challenges, quality assets and management teams showing growth and in-demand capabilities will remain high on M&A priority lists.
Over the year, there were 149 deals completed by private equity-backed strategics (18% of all activity) against 104 in the year before (14% of total activity), as private equity conviction in the space remains high and buy-and-build stories develop. As hold periods mature, we expect there will ve further successful exits during this year.
In 2022 there was a significant M&A resurgence from traditional network buyers. WPP led the way, with eight acquisitions across the vertical, closely followed by Havas with seven. There were also seven deals from Italian innovation consultancy Digital360 as the landscape continued to evolve at pace. Other active strategic buyers included Stagwell and Dept, with six and five deals, respectively, continuing their M&A pattern of recent years.
James Kesner is managing director of CG Results
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