Follow this link to download Peachtree’s 2009 Digital Media Round Up. It’s a pretty good read, if I don’t say so myself. Enjoy!
http://www.peachtreemediaadvisors.com/?p=research
Best,
John
2009 Digital Media Round Up
Tuesday, January 19th, 2010 at 12:14 pm
Posted in Digital Media | Leave a Comment »
Where Have You Been 2010?
Thursday, January 14th, 2010 at 9:19 pm
As noted in the 2009 Digital Media M&A Report, the year is getting started with a head of steam. Valuations are creeping and M&A activity increased substantially in the second half of 2009. More importantly, Peachtree is about to close its first transaction for 2010.
(Digital Media Report: http://www.peachtreemediaadvisors.com/?p=research and
Greentech Report: http://www.peachtreegreenadvisors.com/?p=research)
This should be a big year for M&A, with a continuation of housecleaning as well as some strategic pickups. Expect Google to continue making small acquisitions (I consider a $50 to $200 million acquisition small to them). Also expect many more strategic acquisitions of partnerships. Most CEOs know that they have to grow through acquisition, but are not ready to pull the trigger on acquisitions that are not core to their newly calibrated digital media strategies. Smaller and profitable partners will be in high demand as acquisition targets due to their familiarity with boards.
As a smaller company CEO that survived the year, my advice is to clearly entertain these overtures. Keep the conversation at a high “strategy” or working relationship level. Let them know that you are committed to growing your business and getting after your plan.
By the beginning of the third quarter of 2010, when larger companies are looking at how they are going to finish out the year, that’s when the serious overture will begin. At that point, you’ll clearly need a smart M&A advisor to help you maintain this relationship while running a confidential sale process to secure additional bids for your company. Even though it is a friendly acquirer, it is always better to have more than one bid just to keep the buyer group honest.
We’re off to a great start in 2010 and look forward to hearing from you!
Greentech Mergers & Acquisitions 2009
Wednesday, January 13th, 2010 at 10:19 pm
The Peachtree Green Advisors 2009 Greentech M&A Round Up has been released. In 2009, there were 248 greentech mergers, acquisitions, and capital raise transactions in the U.S. for a reported total of $9.5 billion. Distribution, Storage & Efficiency led the way with 90 transactions.
A resilient U.S. greentech M&A market saw 248 greentech mergers, acquisitions, and capital raises in 2009 for a reported total of $9.5 billion, falling a respective 14% and 4% from 2008. The declines, however, were more than offset by generous amounts of funding from the Department of Energy (DOE), courtesy of the American Recovery and Reinvestment Act of 2009.
As we look ahead to 2010 and beyond, it will be interesting to see whether venture capitalists step up when DOE funding runs out, and whether large utilities and Fortune 500 companies continue funding programs initially financed by the DOE.
For a comprehensive analysis of the greentech M&A environment in 2009, download the complete report from Peachtree Media Advisors at http://peachtreegreenadvisors.com/?p=research.
Best,
John
Five Greentech Venture Capital Stars from 2008
Wednesday, September 9th, 2009 at 10:12 pm
Greentech has emerged as one of the hottest sectors for venture capital funding within the past few years. Today we introduce some of the major players driving this trend. Below, as reported by New Energy Finance, the top five greentech investors of 2008 are ranked by their number of transactions, with total deal value listed as well. The deal values are not entirely accurate, however, as numerous deal values were undisclosed.
[1] Good Energies (21 deals/$65.3m)
As in 2007, Good Energies claimed the top spot, this time participating in twenty-one deals sprayed across a variety of sectors, development stages, and countries. The seemingly low $65.3m figure is misleading due to the presence of fifteen deals with undisclosed values.
[2] Draper Fisher Jurvetson (20 deals/$102.9m)
In addition to leading segments solar and biofuel, Draper heavily focused on early stage companies in the energy efficiency and energy storage segments. Efficiency companies Luminus Devices and Tesla Motors, alongside solar thermal startup BrightSource Energy, headlined DFJ’s list of deals.
[3] Kleiner Perkins Caufield & Byers (16 deals/$187.2m)
Famous for successful tech investments in Google and Amazon, KPCB has recently bet big on greentech. Its $187.2m topped the list for transactions value in 2008, mostly focused in efficiency and biofuel.
[4] RockPort Capital Partners (14 deals/$166.3m)
Solely a greentech-focused VC, RockPort poured money into all areas of the efficiency segment, ranging from green building (Aspen Aerogels) to supply-side efficiency (Powerspan) to digital energy (Northern Power Systems). Investing in both early-stage and late-stage companies, RockPort also made investments in solar and fuel cell technology.
[5] Khosla Ventures (14 deals/$111.5m)
Already notorious for making big bets in greentech, former Sun co-founder Vinod Khosla’s firm kept busy once again in 2008. In particular, biofuel was a major area of investment, including large raises for Range Fuels, Amyris Biotechnologies, and Mascoma.
For more on greentech venture capital activity, you may read Peachtree’s greentech report.
Content Delivery Network Acquisitions "What Happened?"
Thursday, June 18th, 2009 at 8:26 pm
Last month, I went to Streaming Media East to learn a bit more about streaming media and delivering video online…(I know, I’m starting to fall into that half-life blogger statistic!) The reason I went was to see where all of the money was going that had poured into the online video distribution sector. In the last Peachtree Media Advisors M&A report (http://tinyurl.com/6wynvb), I noted an interesting fact that many of the largest exits in 2007 were in the video optimization, efficiency and delivery sector. In 2008, this sector had the largest percentage increase in venture capital pouring into it. You don’t say?
As I was walking the floor, I started to think about one of the characters in a Christopher Guest movie who kept saying the line “What Happened?“ It was a funny bit and I forget what it was about. But I believe Fred Willard kept saying “What Happened?” regarding a character in a movie. Well, that was my exact sentiment as I visited each booth.
It seemed like many of the companies did the same thing or provided the same services. They either optimized the delivery of video content or some how made it more efficient and sparkly. Ok. Since every demonstration I saw looked really fast and great to me, I began to wonder how could all of these companies be making money. At some point it is not about the image quality, but about the story or the content.
Then I met a man named Joe Cooper who was the VP of Sales & Marketing for Mzima Networks. We had an interesting chat about the sector. Joe had a great take on it. He said, “the CDN sector is only a $160 million dollar revenue market and every VC that put their money in the sector is going to have a tough go of it, because there is not enough revenue to support all of these businesses.”
That is exactly what I was thinking. How many Disney’s are out there? In addition, major content producers appeared to be guarding their film libraries heavily and gravitating toward Hulu.com for distribution. So, how were all these companies making any money? Sure, there is a large number of user-generated video sites, but that’s not enough money to support all these companies. Also, my suspicion is that a major media company would prefer to license or partner with the content delivery network rather than own it outright just to keep their options open down the road.
Anyway, we both agreed that an exit strategy consisting of a buyout by a large media company, which is every VC’s end goal, would be harder to achieve these days unless a company had a very unique business model or patent in place that makes their CDN different than the others. So, I guess that means the metrics of distribution have come into question. Right? Businesses are not getting sold based on the amount of content they are pushing through a pipeline. (Well, businesses just plain and simple are not getting sold these days…) What that would mean then is that no matter how good your product is at effectively distributing video content, you’re only as good as the licenses you have in place. Then how would you build a sustainable business model?
So, that brings me to my initial thought…What Happened? I guess media companies chose not to be the buyers of these assets, so cable companies my end up being the buyers. I think we are a few years away before people would prefer to watch movies and cable shows streamed over the Internet rather than subscribe to cable. But you never know. (Call me old school, but I prefer my DVR to my desktop when watching 60 minutes or the Daily Show.) But I did see this company called Move networks that had their finger on the pulse. They seem to think that online cable is sooner than one would think. I think they have the luxury of being backed by Steamboat Ventures and a hundred other VCs. Yup, I’m sure they have enough cash to keep them going until the technology “happens” to catch up. More VC money, I believe is what happened.
(By the way, I found a you tube link to the “What Happened?” bit by Fred Willard in the movie Might Wind below.)
http://www.youtube.com/watch?v=D421N6xlisg
B,
J