Sabtu, 11 Juli 2015

22 MCNs Justify $100+M Price-Tag - So Says Analyst Firm

Last week's acquisition by ProSieben of leading "under the radar" MCN Collective Digital Studio (CDS) -- one of 5 MCNs I identified 6 months back as being "ripe" for acquisition -- may have jump-started Wave 2 of major MCN M&A .  (NOTE: I will publish a deeper analysis -- with my predictions of "who's next" -- Monday morning).  ProSieben pegged the value of that deal at $240 million (for the combined CDS and Studio71 MCNs, together with $83 million in new cash).

In the wake of that deal, research firm Ampere Analysis concludes:

(1) 22 MCNs each justify an acquisition price of "at least $100 million" based on previous M&A comps (the firm relies primarily upon the metric of 1 billion views/month to define these 22 MCNs and then applies a 25-35 multiple on annual revenues); and

(2) the top 100 MCNs as have a collective value of an eye-popping near-$10 billion.  Yes, that's BILLION with a capital "B."

I don't know about that.  Ampere's "treat-all-MCNs-the-same" analysis is rather simplistic and apparently doesn't consider other relevant valuation factors (including strategic "fit," specific consumer vertical focus, each MCN's focus on -- and amount of -- licensable original programming and quality of distribution partners, among others).  But, I certainly believe the MCN M&A race will heat up over the next several months (after being rather cool for the first half of the year).

Here are Ampere's final thoughts on the topic --

 "For those players without a stake in the MCN game, sand is rapidly running through the hourglass ... Many media companies are playing a waiting game: the million dollar question now is when to stop waiting and start acting."

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