Press Launch Date:

New York, NY July 9, 2018

Contact: David Clark, Chief Marketing Officer

+1 212 754 0710 | [email protected] | www.jegi.com

JEGI FIRST HALF 2018 M&A OVERVIEW

Larger deals at “Top of Food Chain” Driving Activity and Value

Mergers and acquisitions in the first half of 2018 across the media, information, marketing, software and
tech-enabled services sectors totalled over 950 announced transactions and nearly $140 billion in aggregate
transaction value (excluding the Time Warner and Twenty-First Century Fox mega-deals). Year-to-date, the
pace of M&A in 2018 is on track to surpass 2016 and 2017 full-year levels.

First half 2018 transaction volume (number of transactions) declined modestly, in line with recent trends,
while transaction value increased dramatically by 43% versus 2017. A notable increase in the number of
large-cap transactions ($1 billion+) drove higher aggregate M&A values across substantially all JEGI sectors.

Generally speaking, H1 2017 was an “easy comp” to beat in terms of transaction value, given the extremely
quiet M&A market on the heels of the 2016 presidential election. But more fundamentally, the
predominance of larger transactions in H1 2018 highlights a number of powerful trends impacting buyers and

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sellers at the top of their sector “food chains”, trends that we expect to remain at work in the market for a
sustained period of time.

To preview, those trends include:

1) The corporate growth imperative

2) Crossing industry lines to find new growth and profit pools
3) Private Equity as an enabler of large scale reorganizations
4) Relaxed anti-trust environment
5) Heightened focus on consumer data security

Notable Sector Transactions and Trends in H1 2018

In B2B Media and Technology, Thomson Reuter’s divestiture of a majority stake in its largest, but low-
growth Financial and Risk business unit to a consortium of investors led by Blackstone dominated H1 sector
M&A value. With an implied Enterprise Value of $20 billion, the deal underscores two powerful trends at
work in the marketplace: 1) the extent to which mature corporations are compelled to reorganize for future
growth, and 2) the extent to which private equity firms can enable large-scale divestiture and reorganization
transactions, particularly for businesses with recurring revenue and highly underwritable cash flows.

Related, Hearst Corporation’s follow-on purchase of a 20% stake in Fitch Ratings at an implied enterprise
value of $14 billion, followed by Fitch’s acquisition of Fulcrum Data (a prior JEGI client) indicates the extent to
which corporations are prepared to continue to cross industry lines in search of growth beyond their core
markets.

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In Consumer Media and Technology, the recently approved AT&T/Time Warner transaction and Comcast
and Disney’s on-going duel for Twenty-First Century Fox portend tectonic change in the digital media food
chain. The concentration of content, distribution and advertiser/subscriber relationships resulting from
these deals is formidable. And AT&T wasted no time in spending an added $2 billion to acquire AppNexus, a
leading programmatic advertising platform, for deeper access to online publishers and advertisers. The
Verizon/Oath transactions look timid by comparison.

While they may appear to be playing offense, the AT&T and Comcast transactions are in fact highly defensive,
reflecting smart phone saturation, pricing pressure for carrier and cable services, and intensifying
competition from Netflix, Amazon and others in the exploding field of streamed content. AT&T and Comcast
are being forced to cross industry lines in search of growth from digital advertising. And going big. While
potentially anti-competitive, AT&T’s ability to point at Google and Facebook’s +60% (and growing) share of
digital ad spend made it easier for the FTC to wave the deal through -- a favourable precedent for similar,
future transactions.

Speaking of Facebook, transactions in the Database and Information Services sector were down dramatically
versus historical and recent trends, due in part to heightened concerns over consumer data privacy.
Uncertainty regarding the May 28 EU launch of GDPR (General Data Protection Regulation) has already put a
damper on data transactions. Disclosures regarding misuse of Facebook data by Cambridge Analytica and
others will likely weigh on sector M&A in the medium term.

Bucking the trend is the recently announced break-up of Acxiom, a take-private transaction designed to
unlock the value of Acxiom’s LiveRamp on-boarding “middleware” business. Analysts believe that the sum of
Acxiom’s parts well exceeds its current market value. In addition to LiveRamp, the parts include Acxiom’s
legacy database marketing operations, AMS. The transaction was catalysed when Acxiom’s share price
tanked in April in response to Facebook announcing its plans to cease third party data licensing. If Facebook
taketh away, then Saleforce giveth: its recent acquisition of Mulesoft, a “comp” in the middleware market,
places a $2+ billion value on LiveRamp. Acxiom bought the LiveRamp business in May 2014 for $310 million.
Oracle, Adobe and Nielsen are rumoured buyers. And AT&T! Interpublic Group (IPG) is the confirmed buyer
of Acxiom AMS for $2.3 billion (eclipsing Acxiom’s pre-announcement market cap of $2.2 billion), as IPG plays
catch up with WPP/Wunderman and Dentsu/Merkle, both recognized leaders in the data-driven marketing
field. Crazy that the value of a Salesforce middleware deal is driving Agency M&A.

In the broader Marketing and Technology Services sector, M&A volume and value were down slightly in H1
2018, but the category remains reliably hyperactive, reflecting on-going consolidation around specialized
capabilities and select market themes. In the last 2-3 years, stiff demand for digital services -- ecommerce,
digital/mobile experience and cloud implementation, etc. – set off a land grab for technical talent in these
fields, particularly among the consultancies and IT services firms who have rushed at the “digital
transformation” opportunity. The traditional marketing services sector has been permanently altered as a
result, especially at the top of the food chain where Accenture, Deloitte, IBM and PWC have emerged as the
largest global digital agencies, driven by M&A. Having planted the flag, the consulting and IT firms are
pushing further into digital marketing with a new focus on back-end data analytics and programmatic
execution services. Get ready for the next wave of sector M&A here.

High valuations and growth rates for digital consultancies have also AT&Tracted the interest of private equity,
who have a love/hate relationship with marketing services. (Talk about crossing industry lines in search of

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growth!). WPP’s rumoured divestiture of Kantar, which has long occupied the very top of the research
services food chain, will be real test of PE appetite for marketing service assets. With $4 billion in revenue,
Kantar is twice as large as German research leader, Gfk, which KKR took private in H1 2017. Sizable pieces of
Gfk are already in the market as part of a radical restructuring there…with a focus on pure-play data
analytics.

Broad-based consolidation is also a “force at work” in the Exhibitions and Conferences sector, led by
Informa’s Q1 2018 sector-redefining acquisition of UBM, its U.K. nemesis/peer, for $6.3 billion. Informa’s
stock is up ~25% since the transaction was announced in January. At writing, Informa trades at 6.7X revenue
and 21X EBITDA, both of which represent significant premia to…Google…highlighting the economic value of
Informa’s massive, event-centric cash flows, and the durable ROI of “face-to-face” marketing. The
Informa/UBM transaction represents another positive “mark” in the incredibly active Exhibitions and
Conferences sector, an area where JEGI has already completed four transactions this year, including the
February sale of Hargrove to Goldman Sachs’ AV services portfolio company, PSAV (on the heels of which
PSAV was acquired by Blackstone in June), and the $300 million sale of Pennwell to Clarion Events (also
backed by Blackstone). More M&A is expected up and down the events and conferences service chain as
buyers are drawn to this attractive model and marketplace.

Software and Tech-Enabled Services

In the Software and Tech-Enabled Services sector, a few deals H1 2018 worth noting in JEGI’s core coverage
categories:

- Adobe acquired Magento for $1.7 billion, a transaction that may mark the end to vigorous
competition between Adobe, Oracle and Salesforce to acquire and assemble the leading commerce
and marketing cloud assets.

- Microsoft acquired GitHub, a developer-focused collaboration platform, for $7.5 billion,

representing another push by Microsoft into social enterprise applications, with a focus on individual
users and productivity, and avoiding the hyper-competitive marketing and commerce cloud space.

- IHS Markit acquired Ipreo Holdings from Goldman Sachs and Blackstone for $1.9 billion, doubling
down on data, intelligence and workflow solutions for financial institutions and capital markets
professionals, and pushing Financial Segment revenue over 50% (auto and natural resources data at
~25 each, for the balance). Seeking more TAM in FinTech?

- Recruit Holdings, a Japanese HCM technology and talent recruitment media company acquired
Glassdoor for $1.2 billion. $200 million invested. Stalled growth. Flat uniques. IPO unlikely. Best
market timing? Right now. “Moshi Moshi” (Japanese telephone greeting). 7X Revenue.

JEGI Very Active in H1 2018

JEGI enjoyed a strong first half, with nine closings and several others moving toward completion. In Q2, we
represented PennWell, an integrated B2B events and information company in its sale to Clarion Events, a
portfolio company of Blackstone; Gartner’s Workforce Surveys & Analytics, a tech-enabled survey and
analytics platform in its sale to ParkerGale; Jobson Healthcare Information, a multichannel marketing
communications and data provider serving pharmaceutical & healthcare professionals, in its sale to Internet
Brands, a portfolio company of KKR; and MSI & Morpace, two top 20 US research and CX analytics firms, in

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their pre-arranged merger and sale to Symphony Technology Group; and Vendome Group in the sale of their
Institute for the Advancement of Behavioral Healthcare, to HMP Communications, a medical information
provider backed by Susquehanna Growth Capital. Stay tuned for additional deal announcements in the
coming months.

Looking Ahead
General economic conditions remain strong heading into the second half of the year. The Conference
Board’s Consumer Confidence Index decreased slightly in June from May, standing currently at 126.4. Lynn
Franco, the Director of Economic Indicators at The Conference Board said, “Consumers’ assessment of
present-day conditions was relatively unchanged, suggesting that the level of expected economic growth
remains strong…and remain high by historical standards. Similarly, the Bureau of Labor Statistics reported
that total nonfarm payroll employment increased by 223,000 in May, well above consensus expectations,
with the unemployment rate in the US at 3.8%, the lowest rate since April 2000.

What to Watch
 FTC anti-trust clearance on recent major deals could encourage corporations to fast-track plans for larger
M&A investments. Corporate confidence and liquidity are high to begin with…
 As reported in PwC’s 2018 Mid-Year Review, U.S. corporations and investors are holding $2.4 trillion in
surplus cash (based on Federal Reserve data), available for large-scale M&A to speed up portfolio
transformation, which would also add to divestiture “supply”.
 10 years after the economic crisis, are ultra-low borrowing costs coming to end?
 Private Equity firms are spending a lot of time on “cycle risk” models…
 Public equity markets remain near record highs, but with historically high levels of volatility. Trade wars
and geopolitical factors are in play.

ABOUT JEGI
JEGI has been a leading independent investment bank for the global media, information, marketing, software
and tech-enabled services sectors for over 30 years. Headquartered in North America, with offices in New
York City and Boston, as well as London and Sydney (through its partnership with Clarity), JEGI has completed
more than 600 high-profile M&A and financing transactions, serving global corporations, middle-market and
emerging companies, entrepreneurial owners and founders, and private equity and venture capital firms. For
more information, visit www.jegi.com.