Technology & Media

The marketing services sector experienced a significant contraction in M&A transaction activity in the first half of 2023, with deal volumes falling to the lowest levels seen since the COVID induced slowdown of early 2020. Consistent with global M&A trends across industries, valuations saw an even greater decline due to the rising cost of capital and lower growth rates among service providers as clients paused technology investments and advertisers tempered media budgets.

Intrepid believes activity is likely to rise in the second half of 2023 and further increase in 2024 based on the backlog of sellers preparing for market entry, increasing global advertising expenditures and normalization of interest rates. According to GroupM, a subsidiary of WPP, U.S. ad spend is expected to grow 5.9% in 2023 to $874.5 billion, excluding political advertising.