Chris Hughes is a Bloomberg Gadfly columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.

Online dating. Online razor blades. Almond milk. Argan oil shampoo. Nothing out of the ordinary here for today’s young customers -- but these mark a nightmare shift in buying habits for traditional consumer, leisure and media giants.

The preferred solution for adapting to a new generation? Expensive M&A. In fact, it’s probably the only solution.

On Monday, German broadcaster ProSiebenSat.1 became the latest company to dabble in millennial dealmaking. It agreed to buy a controlling stake in the dating website Parship Elite.

Drifting Apart
ProSiebenSat's shares have uncoupled from the DAX index in recent months
Source: Bloomberg

The deal values the matchmaker at about 300 million euros ($335 million) including debt, or 12 times Ebitda for the next 12 months. Parship's owner, private equity firm Oakley Capital, will reap more than three times its original investment in under two years.

The immediate reaction from analysts was to raise an eyebrow at the price, with DZ calling the deal expensive.

But this is a familiar story. July saw a spate of deals driven by big corporates' urge to catch up with the tastes of those consumers.

Millennial Mergers
Recent tagets
Source: Bloomberg data

French yoghurt giant Danone agreed to buy WhiteWave, the U.S. maker of dairy alternatives, for $10 billion -- a deal widely criticized because it may not cover its cost of capital for perhaps six years.

Johnson & Johnson acquired Vogue International, maker of OGX shampoo, for $3.3 billion -- an eye-watering 29 times trailing Ebitda. And Unilever paid a reported $1 billion for Dollar Shave Club, another expensive deal when assessed on conventional metrics.

Are these lumbering old corporate making a big mistake –- in the same way old economy businesses overpaid for anything with dotcom in its name back in 1999?

They are in a bind.

The alternative to paying up for these new upstart companies is in-house development. Surely, shareholders might think, these multinationals with their vast financial resources and R&D labs can create something like a shampoo brand all by themselves with the same financial outlay?

Sadly, the answer is only perhaps, and after a long time. The incumbents are starting late, and they usually lack the culture to create such businesses. Even if success was guaranteed, the start-ups would just keep growing and growing in the meantime.

Parship sums up the situation neatly. A big chunk of its customers are in their early 30s -- and getting younger. This is where millennials currently flirting on apps like Tinder might end up when they want to settle down.

Millennial Customers
The largest chunk of Parship Elite's clients are under the age of 34
Source: company presentation

ProSiebenSat appears to have a plan for developing its digital platforms, in part through M&A. The company agreed to buy Swedish travel agency Etraveli Holding for about 235 million euros in October.

With just under 50 percent of Parship being retained by Oakley and management, the entrepreneurial culture should survive intact. As a bonus, ProSiebenSat can market the site through television ads.

That should help it avoid the fate of ITV, which paid 170 million pounds for social networking site Friends Reunited in 2005. Five years later, the British broadcaster sold the site for 25 million pounds, and it has since closed.

The big blue-chips have access to cheap money and need to address what look like durable changes in consumer habits. For entrepreneurs who get millennials, there is no shortage of exit routes for their businesses.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Chris Hughes in London at

To contact the editor responsible for this story:
Edward Evans at