Mergers and acquisitions—M&A—is one leading indicator of the vitality of an industry. A successful sale demonstrates that a business is doing well, growing as anticipated. It demonstrates interest in business ownership within the industry. Even when industries consolidate, if they’re strong, startups and disruptors come along and eventually get sold to large aggregators.
M&A affects every aspect of a media business. In some ways, a business about to be sold has a singular focus: Deliver on the numbers promised in a budget forecast. And then, after a sale, the new owner is occupied integrating the add-on business for as much as six months. All team members, junior and senior, sales, content, marketing and more are impacted. Even association media brands are affected—if not directly in a transaction, then indirectly as they adapt to changes in the for-profit competitive set.
As we move toward the end of the first quarter of 2025, it’s a terrific time to check in with an M&A expert on the state of the business. We’re fortunate to chat with our old friend Mark Holdreith, co-founding partner at New York City-based Media Advisory Partners. Here’s our conversation.
Fox Tales: What’s the overall outlook for B2B media M&A this year?
Mark Holdreith.
Mark Holdreith: We recently posted two pieces on the state of media M&A and one on expectations for future media-revenue growth. You can access them on the “resources” tab of our website (linked here). The three reports are: “MAP’s 2025F M&A Market Outlook” (linked here), “2 Signs that Media M&A Values &Volumes Might Rise in 2025” (linked here), and “Forecasts Expect High Media Revenue Growth Through 2030” (linked here).
The bottom line is that M&A is looking very good, especially compared to the last quarter of 2023 and first quarter of 2024. The macroeconomic environment remains strong, and despite some uncertainties, including geopolitics, now that the election is past us, activity is being driven by the combination of what were steadily declining interest rates and record amounts of dry powder in private equity. In niche media (B2B and enthusiast), individual sectors may have a different profile and appeal to buyers based on each sector’s characteristics. However, buyers are looking to create scale, add new advertising and marketing products, and achieve both cost and revenue synergies through strategic acquisitions.
On the sell side, companies that put M&A processes on hold due to COVID’s negative impact on their financial performance are generally back, performing better. Many are ready or at least close to beginning a sale process. Many founder/owner companies that sat on the sidelines for the last few years find this environment more favorable and are going to market now.
Fox Tales: What’s the outlook for smaller businesses—$10 million or less?
Holdreith: The market for smaller-company exits is also strong. The pool of buyers interested in smaller businesses is considerable in size and is also diverse. Both strategic and financial buyers are interested in add-on acquisitions. Size is less critical if the business or assets are strategic to the buyer.
Surprisingly to most founders of smaller companies, some financial buyers will acquire companies with an EBITDA minimum as low as $1M. Search Funds, a type of financial buyer, are active as well. Search Funds are run by an individual or small group with financial backing from a fund, family office, or high-net-worth accredited investors. Unlike traditional PE, which invests in a portfolio of companies, Search Funds are looking to buy one business that they will own and run themselves.
Fox Tales: What sorts of businesses are likely to be transacted this year?
Holdreith: We will see a wide range of businesses transact. In the last five months, we have advised three M&A transactions at the intersection of artificial intelligence (AI) and media. One was a global AI conference business, while the other two were digital content businesses. One of the digital content businesses’ revenues is advertising-based, while the other content-based business is a community for AI professionals providing custom sponsorships and content to AI brands.
There is strong interest in businesses with multiple revenue streams, particularly if those have meaningful membership or subscription components, high-value data products, and established events businesses. Stand-alone conference businesses remain desirable. Trade show organizers are focused on diversifying their revenue streams. Strong companies serving growth sectors like technology, AI, and healthcare may be especially attractive. Businesses that have developed strong engaged communities, such as peer-to-peer platforms, are very appealing.
Fox Tales: Does a stable and growing advertising revenue stream help in a transaction?
Holdreith: Absolutely! Stable is good. Growing is better. Financial momentum is always a powerful value driver. However, momentum-based value drivers go beyond financials and can include new product offerings, strategic partnerships, increased client retention, and other factors. Buyers want to be as certain as possible about what they are buying. They mitigate risk with lower valuation and less favorable structure. Any factors that indicate the business will continue to perform well post-transaction are worth their weight in gold. A stable and growing revenue stream is always high on a buyer’s want list.
Preparation to ready a business for sale is very important and an effort well invested. Sellers prepared to provide solid historical financials, KPIs, client data, legal agreements, and whose businesses are strongly positioned in a strategically attractive market sector, will achieve better M&A outcomes.
What kinds of advertising products do buyers look for?
Holdreith: Buyers look to provide the marketers they serve with the advertising and marketing products and services those marketers require. This means that the suite of products acquired will vary from buyer to buyer. For example, a pure trade show organizer may be interested in adding hosted-buyer capabilities, while a newsletter producer may seek a content studio. The nature of the market served will also impact the type of services offered. Marketers of big-ticket items, such as aviation, may be less focused on lead-gen, while certain sectors, such as government, present media operators with data opportunities. That said, the trend is to diversify revenue streams.
While the focus has been on the lower end of the funnel, I believe this will shift somewhat, and building brand value/brand equity will gain more attention.