Study: Billions flow into PR tech M&A

Burton-Taylor study looks at how PR tech companies finance acquisitions, the strategies fueling the deals and future moves.

Photo credit: Getty Images
Photo credit: Getty Images

CHICAGO: Cision and its majority owner, private equity firm GTCR, have poured more than $2.25 billion into M&A activity.

That sum includes $2 billion paid up front in cash, $241.5 million paid in stock and $15.9 million of deferred and contingent consideration payable mainly in cash, according to a report by Burton-Taylor international Consulting.

The 153-page report was compiled through Burton-Taylor’s primary research, obtaining data from company filings, press releases and other public statements and media reports, according to Burton-Taylor associate Chris Porter.

Burton-Taylor’s research covered how PR tech companies have financed their acquisitions, the strategies fueling the deals and what future moves they might make.

GTCR started consolidating the market in 2014 when it merged Cision and Vocus under the Cision brand.

The multiples GTCR and Cision have paid for its acquisitions range from 0.2 times revenue when it bought L’Argues de la Presse to 8.8 times revenue when it acquired TrendKite, according to the report.

The $222.4 million Cision-TrendKite deal was financed through a combination of cash ($94.1 million) and shares ($128.3 million).

TrendKite will play the "primary role" on Cision’s second iteration of the Cision Communications Cloud, an all-in-one PR tech platform and the company’s flagship product, according to the report.

Cision added $115 million to its debt after acquiring TrendKite and Falcon.Io, a social media company it bought earlier that year.

With Cision pivoting back to a focus on organic growth, Burton-Taylor "considers that Cision currently has some capacity for small to medium-sized technology or geographic M&A tuck-ins," the report said. "But its primary focus is expected to be on TrendKite/Cision Communications Cloud integration, customer migration and closedown of legacy services."

Meltwater’s total costs around acquisitions since 2016 could total $69.8 million, which consists of $47.3 million in cash, $13.5 million in stock and $9.7 million of deferred or contingent consideration.

The Burton-Taylor report also dove into Meltwater’s $175 million recapitalization deal with Visa Credit Partners, the credit-lending arm of Vista Equity Partners. That recapitalization consisted of a $175 million note payable, due in February 2024, with interest rate alternatives of Prime Rate plus 8.5% per year and LIBOR plus 9.5%, the report said.

Burton-Taylor said Meltwater will have tens of millions leftover for investment and expansion. It also noted that Meltwater’s acquisitions have been relegated to "low-cost technology tuck-ins (numerous examples); geographic consolidation (Canada’s Infomart); and diversification into faster-growing market areas (Sysomos)."

"Any future moves would be likely to fall into those areas," the report said.

Kantar has spent more than $130 million in acquisitions between 2012 and 2018, excluding several deals where financial information was not disclosed, according to Burton-Taylor.

In July 2019, WPP announced it was selling a 60% stake of Kantar to Bain Capital. The transaction is expected to be finalized in early 2020. The deal valued Kantar at $4 billion.

"Future M&A developments will depend on the appetite and focus of its future private equity owner," the report said.

Burton-Taylor noted that Kantar CEO Eric Salama has said in interview with Business Insider and PRWeek sister publication Campaign that the company hopes to spend more on acquisitions under Bain Capital ownership. At WPP, Kantar could only spend about $30 to $40 million on acquisitions every year.

Salama said Kantar could acquire companies in analytics, ecommerce, panel data, behavioral data and social media data.

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