Media, cross-border deals hot: Deutsche

NEW YORK (Reuters) - The media sector remains a hotbed of private equity deal activity, as buyout firms seek to capitalize on growth opportunities and steady cash flows, Mark Epley, head of financial sponsors coverage at Deutsche Bank, said on Tuesday.

Cross-border deal activity is also expected to increase, with U.S. and European private equity firms teaming up on more deals, Epley said, speaking at the Reuters Hedge Fund and Private Equity Summit in New York.

"Media is hot," Epley said, particularly old media companies, where growth rates have slowed but cash flows remain steady.

Indeed, recent private equity interest in newspaper publishing and phone directory businesses has put a M&A spotlight on the industries.

Spanish-language broadcaster Univision has put itself up for sale, and is said to be attracting heavy interest from private equity firms hoping to capitalize on growth opportunities.

In another media deal, Deutsche Bank is leading the financing of the private equity bid to buy Dutch market research firm VNU VNUN.AS, a media deal that has involved the European and U.S. arms of buyout shops and investment banks.

Epley predicted more of these types of cross-border deals, as large U.S. private equity firms tire of high valuations and competition within its borders and seek to team up with other buyout shops overseas.

High valuations across several sectors have prompted private equity firms to take more time in sourcing their deals, leading to a current lull in leverage buyout activity.

But the private equity deals will come, Epley said, and they will get bigger and bigger, probably somewhere in the $25 billion range in the short term.  Continued...