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Marcoms M&A are increasingly being driven by private equity firms according to research from Results International.

In the first quarter of 2018, almost a quarter (22%) of all deals (41) involved private equity. This is double the 11% recorded in the final half of 2017.

Driven by such investment was Capgemini’s acquisition of LiquidHub for $500m and Ocelot Partners picking up Ocean Outdoor for $274m.

Julie Langley, partner at Results International, said: “Total private equity activity for 2017 was up on 2016, and this quarter is showing an even larger jump in deal volumes. Transactions such as LiquidHub and Ocean Outdoor reinforce that not only are private equity finding valuable marcoms businesses to invest in, but that these investments are delivering exits and returns – a key factor in driving continued PE interest in the sector.”

Langley noted that the “holding companies as a whole did fewer deals in Q1 than in any quarter in 2017” showing a slowdown in activity, perhaps ahead of a period of economic caution in the industry.

She notes that WPP has slowed down on the M&A front as it consolidates its entities into a more palatable format. She expects Dentsu to match 2017 and Publicis to dish out some of its “war-chest of €300-500m per year… in areas such as data and digital transformation”.

She noted that while the networks may be experiencing a revenue growth slowdown, that there is “really healthy performance amongst many of the independents who are able to respond nimbly to the changing environment”.

Full-service digital agencies were again the most active subsector of marcoms in Q1 2018 with 28 deals, 15% of the overall market.