The week’s deals and whispers
B2B information. UK-based B2B information and training group Wilmington plc has sold ICP, its specialist leading credit reporting company, to its management team, led by managing director Jennifer Guy. The £3m transaction price will be paid in instalments over the next five years. Since 1983, ICP has provided research in the Middle East, Africa, Asia, and South America, from offices in London and Dubai. Wilmington itself operates across risk-compliance, healthcare and finance-law. Some 57% of its revenues are in the UK, 19% in the US and 15% in Continental Europe. The one-time trade magazine and directories business was a 1990s buyout from the wreckage of the late Robert Maxwell’s bankrupt media group. Its share price abruptly lost 25% two weeks ago after a warning that underlying profit for the year ended 30 June had fallen by 3%. With 2019 now expected to be a year of further fall-back instead of previously forecast growth, the £170m company (which recently spent millions on a move to new London offices) looks distinctly sub-scale and vulnerable. After a few years of quietly shedding advertising-based operations, reducing its dependance on legal training and some neat internationalising acquisitions, Wilmington is feeling unloved by the London stockmarket which worries that Brexit might make things even worse, especially for its sagging healthcare division. Private equity rumours of a 2019 MBO for Wilmington Plc are getting louder. But the revitalised £1.4bn Euromoney Institutional Investor Plc might also be doing the sums.
Magazine-media. The fast-growing UK-based specialist media company Future plc is paying $132.5m to acquire the B2C business of Purch, a US digital publisher in technology and science, with brands including Tom’s Guide, Tom’s Hardware, Top Ten Reviews, and Live Science. Purch, which made 2017 Ebitda profit of $10.1m on $46m revenue, has developed content-based affiliate e-commerce similar to Future’s. It has also built advertising technology to generate best prices in real-time through trading exchanges, which the UK company will now roll-out across its whole UK-US-Australia portfolio. Future was founded 33 years ago in picture-postcard Bath by TED Talks pioneer Chris Anderson. Its 19 years as a UK public company have never been dull. It soared to a £1bn valuation in 2000, 12 months after IPO, before crashing to earth. It recovered in the early years of the century but then suffered from print disruption, M&A that didn’t quite deliver, global over-reach, and high overheads. The company’s chequered history, though, was rooted in its long-time dependence on the once-booming newsstand sales of premium-priced print magazines with cover-mounted discs and computer games. Ouch. The company has always had technology smarts (its 10-year-old TechRadar has some 30m monthly uniques) but it has taken current CEO Zillah Byng-Thorne (ex AutoTrader) to do the deals and pick the people that have shifted the centre of gravity from print towards e-commerce and events. Her painstaking four-year strategy demonstrates that media transformation often depends on buying enough building blocks to change the operational balance of a legacy business. Future’s deal-making has enabled it to squeeze the profits out of a still large print portfolio while acquiring and developing new skills, technologies and services without the risk of suffocation by the old guard. The company has also pushed its print-centric content strongly towards the reviews, lists and buyers’ guides which attract online audiences and propel e-commerce. But shareholders (some of whom date back to Future’s life-support rights issue in 2001) can still get jittery. Despite a share price which has soared 60% in the past year, it has fallen back 12% in the last few days. US acquisitions can do that for British companies, and the Purch deal is also being cautiously funded by a deeply-discounted rights issue. Although two-thirds of Future’s £15m profit currently comes from its home market, this latest acquisition should swing the balance sharply to the US – where the majority of the UK company’s online audience (and 200 of its staff) are already based. Specialist consumer media and the £250m Future Plc – one of its liveliest stars – are looking good.
Magazine-media. The £160m-revenue UK-based Dennis Publishing, owner of The Week, a slew of motoring, computer and tech magazines, and Buy-a-Car e-commerce is set to be acquired by private equity firm Exponent for a price of some £170m, 1 x revenue. Not really a low price but many observers reckon that The Week itself may be worth more than half of the sum being paid, and all kinds of non-media types may value Buy-a-Car at £75m+. The attractions of Dennis at a time of magazine-market weakness include: its strong subscriptions revenue (by contrast with most newsstand-dependant UK mags),the fast-growing e-commerce, the US (and global) growth potential for The Week and current 10-15% profit margins. On the downside are a weakening print portfolio (4-5 magazines may soon be closed), decline in UK sales of The Week (due, perhaps, to pre-sale marketing cutbacks), and low profit margins in e-commerce. Exponent will fancy its chances of turning those negatives round and getting strong growth from the company built over 40 years by the late Felix Dennis whose amazing Heart of England Forest charity is selling the company. Exponent has previously scored with media buy-outs for educational company TSL (now owned by TPG), BBC Magazines (now Immediate Media, owned by Burda), database firm Gorkana and coupon brand Wowcher! (ex Daily Mail). Exponent, which expects to complete the acquisition-MBO during August, won the auction by out-bidding DMGT, Burda, and private equity firms Inflexion and HIG. The estimable Dennis CEO James Tye and his sprightly team will count themselves lucky not to have been swallowed up by an existing management, even before cashed-up executives from TES and Immediate give a good rap to the nice guys at Exponent. Felix Dennis was always one to watch. Now, his legacy company is a must-see.
Events. ITE Group plc has completed its previously announced acquisition of Ascential Events Limited (The International Spring Fair etc) from Ascential plc for a total of £300m. It will help to re-balance a company that has traditionally been weighted towards the Russian market where it has long been the largest exhibition organiser. The decline of that market (due to the global banking crisis and also trade sanctions) has weighed on ITE. But its astonishingly steady 30% profit margins and a long tail of small exhibitions tell the story of a company which now needs catch-up investment in acquisitions and neglected core shows, while divesting a fair chunk of its 270+ exhibitions. This is the year of deals in global exhibitions. Everyone is waiting for the next moves from Blackstone (Penwell and Clarion), Reed Exhibitions, and Informa, the new market leader (now digesting UBM). Ex UBM management fall-out might even spawn some new organising companies. Meanwhile, will ITE be the diner or dinner?
Books. Investment firm KKR has agreed to acquire RBmedia – the world’s largest producer of audiobooks and spoken content – from Shamrock Capital. Terms not disclosed. RBmedia has existed only since 2017 but its predecessor Recorded Books (formerly owned by Wasserstein) dates back 40 years. The company whose other content brands include Tantor Media, W.F.Howes and High Bridge, claims 35,000 exclusive titles and its own technology platform. KKR, which estimates the audiobook market will be worth $900m this year (up 20%), says: “Audiobooks create incremental time for enjoying great books, and one thing we lack today is time. We think this type of content will continue to take up more mind-share, especially among younger consumers.” So says Richard Sartnoff, the KKR adviser who was formerly chair of Bertlesman, 75% owner of Penguin Random House. Another reason why this deal is eye-catching.
B2B information. The Idaho-based Truckstop, one of two leading US freight matching and load board solutions, has acquired transport software company Grizella. Terms not disclosed. Truckstop. com was founded in 1995, when IT specialist Scott Moscrip began offering a better way for truck drivers to find loads than by posting signs on the side of their trucks or gathering around local bulletin boards. The still privately-owned company, which was the first of its kind in the US, now describes itself as a collector and provider of big data.
News. Media holding company Africa. com has announced its acquisition of Primedia and MTN-owned news portal, iAfrica. com. The terms of the agreement were not disclosed. Africa. com is a digital media company aggregating, producing, and distributing business, political, cultural, lifestyle and travel news related to the continent. It describes its Top 10 as “the smart choice for busy people who don’t have time to filter through all of the headlines searching for the latest news on Africa… the trustworthy curated news source that makes staying up-to-date quick, easy and interesting.”
Events. DVV Media Group has acquired the London-based events and digital media business Smart Rail World Ltd whose international events include: Smart Rail, Smart Transit, Smart Metro, Safe Rail and the Transport Security Congress. DVV is a 71-year-old Hamburg-based privately-owned provider of business information for the international transport and logistics industries. It employs 300 people, mainly in Germany. Its UK business had revenue of some £2m in 2016. Its UK brands include Railway Gazette International, Motor Transport and Commercial Motor, all once owned by Reed Business Information.
News. Ringier Sportal SRL has struck a deal with Intact Media Group to acquire its Romanian sports magazine Gazeta Sporturilor, including the publication’s print edition and website GSP which is the leading online sports portal in Romania with more than 3.5m monthly uniques. The print edition of Gazeta has a daily circulation of 20k copies. Ringier Sportal is a joint venture between Ringier Romania and Bulgaria’s Sportal Media Group and believes the transaction will make Ringier Romania the country’s digital media leader. Ringier is the Swiss privately-owned media group whose CHF1bn revenue (c£750m) is 35% digital.
B2B information. Equifax Inc has acquired DataX, Ltd, a leading specialty finance credit reporting agency and alternative data provider to lenders in the UK. Through DataX, Equifax will help lenders expand credit access and broaden financial inclusion for more consumers, specifically in underbanked populations. Transaction terms not disclosed.
The run-off between two bidders for Dennis, UK-based publisher of The Week, Viz, AutoExpress, Cyclist, Money Week, Computer Active, EVO, and the Buy-a-Car e-commerce platform is expected to be between two private equity companies. A late bid from the Daily Mail group only for The Week is believed to have prompted Livingstone, handling the sale, to explore whether it could increase the total proceeds by accepting complementary bids from two publishers (the Daily Mail for The Week in the UK and US, and Burda for the rest). But it is now believed that private equity firms will offer more, perhaps up to £150m, for the whole company. Insiders also believe that a private equity deal would be most likely to involve the current Dennis management in a buy-out whereas a “trade” buyer is more likely to integrate the Dennis media into its existing management structure – and scrap some jobs. It is also thought likely that the trustees of the late Felix Dennis’s Heart of England Forest charity, who are selling the company, would want to retain some level of shareholding so they could benefit from future success. The sale is expected to be agreed by the end of July.
B2B information. Law Business Research Ltd (owned by Levine Leichtman Capital Partners) has partnered with management to acquire the UK-based Globe Business Media Group, a provider of business intelligence on international law and IP. Globe’s flagship platform, Lexology targets in-house lawyers. The 22-year-old LBR claims over 2,500 institutional clients from more than 100 countries. In 2016, it had revenues/profit of £18m/£5.6m.
Advertising. Martin Sorrell’s post-WPP fightback vehicle S4 Capital has acquired the Netherlands-based global digital agency MediaMonks. It revenues of c€110m and operates through 11 offices in 10 countries. The combined group has over 750 people and clients including Adidas, Amazon, GE, Google, Hyundai, JAB, Johnson & Johnson, Netflix, 3G and Weber. At 15x prospective earnings, this is a rich cash-shares price, presumably made more digestible by that fact that Sorrell beat WPP in the auction. What’s next in Sorrell’s campaign to build a post-digital, different kind of marketing services group?
B2B information. FPE Capital has apparently bought control of the UK-based IWSR global drinks database for £7m (€8.1m). The full deal has not been disclosed but the ISWR, as recently as 2016, might have made profits of £2.7m (according to filings for its parent company). So nothing is too clear. The 40-year-old IWSR (formerly the International Wine & Spirits Record) gathers data on drinks brand performance in 157 countries. Its founders, the Smith family, will remain minority shareholders with Alastair Smith staying as a director. Neil Smith, former COO of B2B group Wilmington plc, becomes chair of IWSR under its new ownership. Mark Meek, who took up the role of CEO four years ago, formerly held the same position at Mike Danson’s Datamonitor (sold for a hangover-inducing £513m to Informa in 2007) and parent company Progressive Digital Media. Very data-rich.
Broadcast-streaming. 21st Century Fox’s most recent offer of £14 per share, valuing the pan-European Sky TV at £24.5bn (a significant improvement on its initial bid in 2016 of £10.75, and 12% ahead of Comcast’s previous bid of £12.50) has just been topped by Comcast further increasing its bid to £14.75 per share. Fox already owns 39% of Sky and all eyes are now on their response to Comcast. Comcast and Disney are both bidding also for 21st Century Fox itself. It remains at least possible that Disney will win the battle for Fox but that Comcast will get Sky – or at least the 61% not owned by Fox. That would be a bitter-sweet outcome for the cashed-up Murdoch family who have long wanted to acquire 100% of Sky.
Music. Hipgnosis Songs Fund Limited, the new investment vehicle of former Elton John and Guns N’ Roses manager Merck Mercuriadis, successfully floated on the London Stock Exchange this week, raising £200M to buy up music copyrights. It immediately announced its $23m (£18m) acquisition of a 75% stake in the catalogue of American singer-songwriter, record producer and rapper Terius Youngdell Nash (better known by his stage name “The-Dream“).
Magazines. The UK-based specialist magazine publisher Anthem has acquired Women’s Running from Wild Bunch Media. Terms not disclosed. The fast-growing Anthem, which was founded 15 years ago by ex Future publishers Jon Bickley and Simon Lewis publishes magazines and websites in the music, food and mindfulness sectors. It has twice been awarded as Independent Publishing Company of the Year in the UK.
News. America’s leading Spanish-language broadcaster Univision Communications wants to sell the Chicago-based satirical media The Onion as its private-equity owners grope for an exit. It has hired Morgan Stanley. It is also seeking to sell Gizmodo Media Group, just two years after buying all of the online media publications. After a rapid acquisition of English-speaking online properties in 2016, Univision is reversing its strategy by selling Gizmodo (formerly Gawker Media) and The Onion. Univision acquired Gawker by outbidding Ziff Davis with $135m offer. Days later, it shut down in the wake of a $115m libel action. Univision is also looking to sell its Fusion Media Group (also launched in its madcap go-English year of 2016). FMG is the company’s multi-platform, English language division dedicated to serving “young, diverse America”. Oh dear.
Broadcast-streaming. Paris-based Molotov, which offers 34 channels of free live streams, is looking for an acquiror. It has raised $34m from Sky and others since its launch in 2015. Molotov was founded by serial media entrepreneurs Jean David Blanc, Pierre Lescure and Jean Marc Denoual. There is rumoured to be interest from French telecom giant Orange. Molotov.tv claims it has 2m regular viewers, of which 500k use the platform “almost daily”. Some 4.1m registered users are said to have used the service at least five times. A strong cocktail.
Broadcast-streaming. The US’s largest radio broadcaster iHeartMedia (849 stations across the country, outdoor advertising and music streaming) is undergoing bankruptcy proceedings. This has prompted both Silver Lake Partners and John Mallone’s Liberty Media separately to run the rule over it as a potential acquisition. The former Clear Channel Communications (whose troubles stem from a leveraged buy-out in 2008) is expected to emerge from bankruptcy in early October, with debt reduced from $20bn to $10bn. It is likely then to seek a buyer. Last month, Liberty Media withdrew its proposal to buy 40% of iHeart for $1.16bn, which, when factoring in the $10bn of remaining debt, would value iHeart at $12.9bn. But creditors believe the company is worth $12-15bn. Easy to sense the deal and to predict that Liberty will do it.
Broadcast-streaming. Europe’s leading independent TV production house Endemol-Shine is jointly owned by Fox and Apollo Global Management. It has reportedly received bids from ITV, FreemantleMedia, Lionsgate and Sony Pictures Entertainment. In the era of streaming, TV production is hot.When will the UK’s leading commercial network ITV give its shareholders a payday by floating off its own production group?
Events. Monomax, the privately-owned publisher of London’s Square Mile restaurant guides, has sold its Venues & Events Live exhibition to Ocean Media Group. The Billingsgate, London exhibition, which attracts some 7,000 event bookers annually, was launched in 2005. The sale follows Monomax’s 2016 disposal of its Imbibe Live drinks trade exhibition to Reed. The £8m-revenue Ocean Media is a private equity-owned B2B exhibition organiser and magazine publisher in the wedding, parenting, social housing and stationery sectors.
News. Media startup Uzabase is acquiring Quartz, the six-year-old New York-based digital business news platform, from David Bradley’s Atlantic Media. The deal is valued at $75-110m, depending on Quartz’s financial performance over the next 2-3 years, and is expected to complete this month. Tokyo-based Uzabase, which was founded by two investment bankers 10 years ago, publishes NewsPicks (subscription-based business news) and SPEEDA (financial information and corporate intelligence).Under the deal, Quartz will now manage the English-language version of NewsPicks which entered the US market last year as a joint venture with Dow Jones. NewsPicks has 3.3m registered users in Japan, with 64,000 paying $15 per month. Quartz relies mainly on branded content for revenue. Now, though, it plans to replicate the NewsPicks’ subscription strategy. The ultra-smart Quartz describes itself as “a native news outlet for business people in the new global economy”, 70% of whom are said to access it via mobile devices and some 40% from outside the US. It claims a global audience of more than 100m people, including 22m monthly web site visitors, 85m video views on facebook and Twitter, and some 700k subscribers to its newsletters including the highly-rated Daily Brief. Quartz is believed to have annual revenues of some $40m and profits of $3m. It employs 215 people including 100 journalists across the world, including recruits from the Wall Street Journal and The Economist. Alongside, Business Insider (now said to be newly-profitable under Axel Springer’s ownership), Quartz has long looked like nothing less than the future of digital news, with its emphasis on high-quality journalism and exclusive content. Owner Bradley had a background in consulting before becoming a publisher in 1997. He acquired his flagship The Atlantic magazine two years later. He is an expansive media boss who has invested in journalism – both in print and digital. His team were rocked by the declaration that he will be divesting all his media activities before he is 70 – in 2023. Last year, he sold a majority share in The Atlantic to philanthropist Laurene Powell Jobs’ Emerson Collective (which has also discussed investing in BuzzFeed News). He still owns National Journal, DefenceOne, and Government Executive.
Advertising. The fur is flying at WPP where the world’s largest marketing services group is competing with its founder and former CEO Sir Martin Sorrell in an apparent €300m (£265m) bidding war for MediaMonks, the Dutch-owned digital production company. Sorrell’s S4 Capital wants to make MediaMonks its first acquisition. The 17-year-old Hilversum-based company employs some 600 people, principally in the UK, US and Brazil and is described as a prolific creator of digital work for major brands including Audi, KFC, Uber, Lego and Mercedes. The agency describes its productions as being “crafted with care, coded by coffee, celebrated by champagne”. But WPP has cranked up the pressure by threatening that Sorrell will lose his £20m WPP deferred bonus if he doesn’t back off. Its letter from solicitor Slaughter & May claims he is “likely to be in breach of his confidentiality obligations” which implies that MediaMonks was a documented target of WPP from Sorrell’s days. Sounds pretty soggy, and most insiders believe it is nearly a done deal for Sorrell. Meanwhile, he has sought shareholder approval to raise S4 Capital’s acquisition funding to £1bn. We still think Ebiquity, the UK-based and thinly-global data group, is also in his sights. Or should be.
B2B information. Incisive Media’s chairman and principal shareholder Tim Weller is the B2B veteran whose back story includes a sizzling London IPO in 2000 and – seven years later – the painful $630m acquisition of American Lawyer. Now, he’s back on the acquisition trail after a long absence, with the purchase of Open Door Media Publishing (Investment Europe and International Investment). It is believed, however, to be a nominal price. ODMP was founded in 2013 by Nick Rapley and Louise Hanna through an MBO from – Incisive Media, under its previous private equity ownership. Incisive’s portfolio includes Investment Week, Post, Computing, The Inquirer, Risk. net, Central Banking Journal and FX Week. Incisive Media celebrated its slimmed-down ‘independence’ in 2017. More deals expected.
News. Sanoma increased its shareholding in the traditional Finnish news agency from approximately 33 to 75% by acquiring the shares of Alma Media, the publisher of Iltalehti and Kauppalehti, and TS-Yhtymä, the publisher of Turun Sanomat. The price was not disclosed.
B2B information. The Chicago-based EnsembleIQ (backed by private equity firm RFE Investment) which was formed in early 2016 out of the mergers of Edgell Communications, Stagnito Business Information, and the Path to Purchase Institute and, subsequently, B2B brands from Rogers Media, has acquired Lebhar-Friedman. The 93-year-old, family-owned publisher’s portfolio includes the controlled circulation free magazines Drug Store News, Convenience Store Age, and Hardware + Building Supply Dealer, as well as the SPECS Show, a 55-year-old annual brick-and-mortar retail conference, which has an annual attendance of 1,000. Terms were not disclosed.
Broadcast-streaming. London-listed £1bn-revenue Entertainment One (Peppa Pig and PJ Masks) has acquired the remaining stake in feature film production and sales company Sierra Pictures. eOne has distributed such films as “Spotlight”, “Arrival” and the “Divergent” series, as well as television shows including “Designated Survivor” and “The Walking Dead.” Sierra has backed the likes of “Tully,” “American Animals,” and the upcoming adaptation of James Frey’s “A Million Little Pieces.” eOne originally invested in Sierra/Affinity in 2015.
Advertising. The US-based cinema advertising company Screenvision Media has been acquired by Boston-based Abry Partners. The company’s existing owners, Shamrock Capital and AMC Entertainment, will retain minority stakes as part of the agreement. Terms of the transaction were not disclosed, but the sale price is rumoured to be $380m. Screenvision, whose revenue hit $220m in 2017, sells advertising over 15,000 screens in 2,300+ theatre locations across the US. Shamrock Capital bought the company for just over $100m in 2010 from shareholders including ITV.
Magazines. The Belgium-based Roularta Media Group has now received Belgian regulatory approval and is paying €33m (in debt and liabilities) for the Sanoma magazine brands including: the weeklies Libelle/Femmes d’Aujourd’hui (245,504 copies) and Flair (Dutch/French editions); the monthlies Feeling/Gaël, La Maison Victor, Communiekrant, and Loving You and the e-commerce platform She Deals. Total 2017 revenues of the brands was €78m, and the deal price is 5.5 x EBIT, which sounds relatively high but it is not being paid as cash. Sanoma is the €1.4bn-revenue leading Finnish media company which employs some 4,000 people in Finland (where its magazines, TV, radio and newspapers are said to reach 97% of the entire population each week), Belgium and the Netherlands. It is also a leading European provider of ‘learning solutions’ in print and digital, in the Netherland, Poland, Belgium, Finland and Sweden. The 130-year-old Finnish company has now recovered from a severe profits slump in 2015, largely due to over-expansion in magazines right across Europe over the previous decade. Roularta Media has revenues of €400m and operates newspapers, digital media and broadcasting services in Belgium, the Netherlands, Germany and France.
Events. In a creative three-way deal, Connecticut-based WorldTek Events will merge with Fourth Wall Events, of New York, and Long Island-based McVeigh Associates, an independent meeting planning and events company. The new entity will be called McVeigh Global Meetings and Events, based in New York City with close to 100 employees. The new name implies that what have been three US-centred businesses are now planning to go international.
B2B information. The technology-focused $6bn-revenue holding company Fortive Corporation (capitalised at $27bn on the NYSE) has entered into a definitive agreement with Warburg Pincus private equity to acquire Gordian, a privately-held, leading subscription-funded provider of construction cost data, software and service, for $775m in cash. The South Carolina-based company makes software that tracks the costs of construction projects and manages operations. No price was disclosed but Fortive says that ROCI will be 10% within 5 years.
Books. Established in 1958, the highly regarded Hind Pocket Books are considered pioneers in publishing Hindi and Urdu paperbacks in India. Penguin Random House is the world’s largest book publisher, formed by the 2013 merger of the interests of Bertlesmann and Pearson. Transaction terms were not dislosed.
Magazines. Either side of this weekend, the deadlines will come and go for the final round in the auctions of Time, Money, Sports Illustrated and Fortune in the US; and the Dennis Publishing company, mainly in the UK. Meredith, which is getting stuck into the rest of the former Time Inc portfolio with stories of even more cost savings and new revenues on the food-drink-home brands, is selling Time, Fortune and Money through Citi, and Sports Illustrated through Houlihan Lokey. Meanwhile, in London, Livingstone is auctioning the tech-smart Dennis, which some would-be buyers have viewed as potentially three separate businesses: The Week (in the UK and US), Buy-a-Car (a fast-growing UK online auto retailer), and a slew of auto and tech magazines. The race for Dennis has thinned since some private equity firms realised that, among other things: the 200k circulation of pioneering The Week is now propped up by 50k free copies in the UK; some of the once-mighty tech magazines will have to close; and that – for all its undoubted success – selling cars online is a relatively low margin and highly-competitive business. There is a key difference in the sale processes of the Time Inc and Dennis magazines. Meredith will sell its legendary brands to the highest bidder and hope for some trophy prices. But Felix Dennis’s legacy company is being sold not by a business but by the late publisher-poet-philanthropist’s amazing Heart of England Forest charity. The charity trustees may, therefore, decide to take some account of buyers’ plans for what has been one of the UK’s brightest media companies. That may just favour Burda whose combination of Dennis and its own Immediate Media would produce not only the UK’s second largest magazine-media group but also a very welcoming home for the people who helped Felix Dennis make his publishing fortune. That, at any rate, might become the tie-breaker if the offers from private equity firms and Burda are close. It’s getting hotter in New York and London.
Broadcast-streaming. In a blow to Comcast, the US Department of Justice has waived through the Disney deal, on condition that it divests of 22 sports networks owned by Fox. Competition clearance will still be required in other jurisdictions, but this clears a major hurdle. It is believed that Comcast is getting ready to make a new offer, possibly backed by another media group or private equity firm. But the smart money is firmly back on Disney. With so much media up for grabs in the coming race for global streaming dominance, though, the fallout from Disney-Fox-Comcast seems sure to include the loser splashing out on other media companies – in the US or Europe. It’s hardly begun.
News. BH Media (controlled by Warren Buffett’s Berkshire Hathaway) comprises 30 daily newspapers, 47 weeklies and 32 other print products, including the Omaha (Nebraska) World-Herald, the Waco (Texas) Tribune-Herald and the Richmond (Virginia) Times-Dispatch. Under an unusual arrangement, BH will continue to own all the newspapers (for the long-term, the great investor says) but Iowa-based publishing group Lee Enterprises will be paid $5m per year plus a share of all earnings above $34m, simply to manage them. Now that’s a creative deal that might just make newspaper management teams and private equity firms put their heads together – especially in the UK.
Movies. The Dallas-based private equity firm Lantern Capital is dragging out its negotiation around the stricken Weinstein & Co amid reports that it has dropped its offer price from $310m to $287m, plus debt. This may endanger what, just one month ago, had looked a done deal. A bankruptcy judge must still approve the price change, which is strongly opposed by Weinstein Co. creditors (of course).. Lantern has become alarmed by disputed payments of millions of dollars allegedly owed to various A-list actors and directors. For instance, Robert De Niro claims he is still owed almost $1m for his work on “Silver Linings Playbook.” Could the list of stars and their IOUs yet be the basis for a Weinstein blockbuster?
B2B. Less than a year after SouthComm founder Chris Ferrell left the company to form Endeavor Business Media, in Tennessee, he is buying his old company’s remaining B2B media including 16 magazines and 10 trade shows. Ferrell, who founded SouthComm Inc in 2007, has had to watch as the company has spent the past few months selling-off its weekly newspapers including the Nashville Post and Nashville Scene, the Washington City Paper, and Kansas City’s The Pitch. That (and the Ferrell departure that preceded the sell-off) was an apparent bid to focus on the B2B interests which the ex boss has now bought. Endeavor, which earlier this year completed two other deals, now has 23 publications, 17 websites, 20 trade shows and employs 190 people. Ferrell’s fellow directors in the ‘new’ company include ex SouthComm directors Townes Duncan (former chairman) and Patrick Rains. Neat play.
Broadcast-streaming. Hit by stubbornly poor trading and last month’s departure of the CEO after 10 years, Blackstone is rumoured to have appointed Deloitte to find a buyer for Ideal Shopping Direct which sells home, garden, kitchen, technology, health, beauty and craft products via UK shopping and craft channels on Sky, Freeview, Virgin and online. Blackstone acquired the parent company of Ideal World Shopping Channel and Craft Channel from Inflexion private equity for £200m in 2015. But revenues have drifted down from £149m in 2014 to £142m in 2016 and are thought to have fallen to some £130m last year. It is believed that the previous year’s EBITDA profit of £12m may also have been wiped out. Ideal World’s abortive move into US shopping channels and a failure to increase online revenues in the UK lead observers to believe that Blackstone will be lucky even to match the £78m that Inflexion paid for the business back in 2011.
Broadcast-streaming. Atlanta-based Gray is acquiring the privately-owned Raycom, the Alabama-based operator of 65 TV stations, for $3.65bn. The combined company will reach nearly 25% of total US households with 142 television stations in 92 regional markets and will be the country’s third largest local TV group. It will serve markets as big as Cleveland and as small as Ottumwa, Iowa but will have to sell-off stations in nine markets where both companies already own stations. The deal comes at a time when the US regulator is making it easier for media companies to buy TV stations in the same market, and for local stations to jointly sell advertising time. It is expected that the new climate will prompt many more deals especially among TV, radio and newspaper owners which are scrambling to compete with digital media. The Gray deal is expected to complete by the end of 2018.
Broadcast-streaming. Marc du Pontavice’s 19-year-old Paris-based company that produces animated series and feature films (eg Space Goofs and Oggy and the Cockroaches) and trades on Euronext, has raised €22m from undisclosed private investors in return for a 9% equity stake.
B2B information. London-based private equity firm Lyceum Capital is rumoured to have hired advisers Raymond James to find a buyer for its AgriBriefing, the increasingly international B2B specialist which was formed in the UK with the 2012 acquisition of Farmers Guardian from UBM. AgriBriefing (formerly known as Briefing Media) was founded by Neil Thackray, Rory Brown and Rupert Levy, initially to publish in the media, farming and medical sectors. But their decision to focus exclusively on agribusiness has been justified by the rapid development of data services and LAMMA, the UK’s largest farming machinery and equipment exhibition. But Farmers Guardian remains at the core of a company which may now have revenues of some £25m and profits of at least £10m. It has long been the UK’s second agricultural news brand (behind RBI’s Farmers Weekly). But there’s no mistaking which has been the most adventurous for the past six years. Farmers Guardian’s fairly steady 31k weekly circulation is now 60% “members” who pay up to £199 (almost double the 2012 subscription price) for a neat package of offers including early access to classified ads, data services and insurance discounts. The swing to global prices and analytics has been reflected in the smart acquisition of: AgriMoney, Global Data Systems, of France, and the 160-year-old, US-based Urner Barry. It’s the strategic move up the value chain (and away from advertising) that CEO Neil Thackray, one of the UK’s most experienced B2B media executives, once espoused in his company’s former media conferences. AgriBriefing now claims its revenue is 70% recurring (subscriptions) and 50% outside the UK. Its news, prices, insights and events are claimed to reach over 500,000 professionals in 20 countries. So, AgriBriefing really could fetch £150m – 15 x its value in 2012 and 6 x its value in 2015. If B2B media was the stuff of movies, Hollywood would be lining up to tell the story of an old-fashioned trade magazine publisher which turned itself into a high-value information provider in six short years.
Magazines. David Pecker’s American Media Inc is buying Bauer’s US celebrity weeklies In Touch, Life & Style and Closer (and nine teenage magazines) for a price believed to be $80m. The deal leaves Bauer’s once-dynamic 37-year-old New York business with just three ho-hum women’s magazines. That’s a significant pull-back by Bauer and means that AMI – which publishes the National Enquirer, Star magazine, OK!, US Weekly and several smaller supermarket tabloids – now sells more than 1m celebrity magazines every week, in addition to Shape and Men’s Fitness. It marks further consolidation in the churning US magazine market after the acquisition of Time Inc (by Meredith), Rodale (Hearst), Rolling Stone (Penske) and US Weekly and Men’s Journal (AMI). That’s almost $3.3bn spent on US magazines in little more than a year. And still to come is Meredith’s auction next month of Time, Fortune, Sports Illustrated and Money. Pecker’s supermarket weeklies are singular publishing. Their revenues depend on scandalous cover stories that persuade people to pick up and buy at the checkout: it’s clickbait in print. He now dominates this tabloid category but Meredith’s high-flying People remains the most profitable US magazine of all, with a larger circulation than all AMI’s weeklies combined – and a better class of gossip. But Pecker will intensify the chase. He is the one-time accountant who became a publisher after working with Peter Diamandis to acquire CBS’s specialist magazine portfolio (Woman’s Day, Car & Driver, Road and Track et al) for $650m in 1987. The portfolio was flipped to Hachette for $1bn a year later. It was a dealmaking masterclass for Pecker. But, for all the AMI thrills and spills of the past 20 years (including a $1bn bankruptcy in 2010, and Pecker’s front-line role in picking the racy covers that make and break screen stars and politicians), he may now be best known as a close friend of President Trump. This week, he was even called as a witness to the Mueller enquiry into the conduct of the 2016 presidential campaign. It is too ironic that Trump’s best buddy is himself the creator of so much fake news. National Enquirer readers don’t get to read much about those wild Trump stories of girls and pay-offs which are exercising the president’s lawyers. Trump’s life should be red meat for the AMI tabloids but not a bit of it. Instead, he is treated to the kind of guff that – in the 1990s – Pecker weaved through his fawning Trump Style magazine. But David Pecker knows how to make money from magazines and – like, say, Richard Desmond in the UK this past 30 years – he can be relied upon to keep upstaging the old stagers of traditional media. For the endlessly-fascinating Bauer Media, though, the US sell-off marks a new decisiveness just as its revitalised management team is squeezing results from the turnround of high-priced magazine acquisitions in the UK and Australia. It’s a fair bet that the €2bn family-owned German company – which never used to sell anything or retreat from anywhere – will soon quit the US altogether, to concentrate longterm in Europe and the AsiaPacific on its fast-growing radio, TV and streaming.
B2B information. The £1.7bn events and information group Ascential plc (Cannes Lions, WGSN, MediaLink, and Money 20/20) is buying the UK-based media-marketing data company WARC Ltd for an initial £19.5m plus deferred consideration of up to £4.5m in 2019. The deal is expected to complete on 2 July. WARC (formerly known as the World Advertising Research Center) is a global digital subscription business that helps brands, agencies and media platforms assess their effectiveness across all channels. Founded in 1985 by advertising guru Mike Waterson, the company offers advertising best practice, evidence and insights from the world’s leading brands and includes the Gunn Report ranking of effectiveness in advertising. The business employs some 90 people in London, Washington DC and Singapore and is said to have 1,200 customers globally. In the year to 31 March 2018, WARC had revenue of £10.8m (10% growth) and EBITDA of £2.2m. Ascential will combine WARC with Cannes Lions’ The Work, to form a digital subscription product of scale. It’s a good bolt-on deal for the UK-based ex EMAP company whose Cannes Lions (taking place this week) has been wobbling a bit. Could Ascential’s growing interest in all things media lead to an interest in the UK’s premier marketing media group Centaur – or in battered data group Ebiquity (see last week’s MediaDeals)?
B2B information. Europe-focused Bridgepoint private equity is buying the media it uses. It is to acquire a majority stake in PEI Media – a global provider of publications, data and business conferences on alternative asset class investment, named after its major brand Private Equity International. Details of the transaction have not announced, but the purchase price is rumoured to be £120m (some 18 x 2017 EBITDA of £6.5m). The £19m-revenue business is being acquired from its founders, management and minority equity shareholder, LDC. PEI was formed following a 2001 management buyout from Euromoney Institutional Investor plc. It has grown a diversified portfolio of alternative asset-focused publications, databases and events. Headquartered in London with offices in Hong Kong and New York, the company employs some 180 people and has clients in 80 countries. Its publications include PERE, Infrastructure Investor, Private Debt Investor, Private Equity International, Real Estate Capital, Private Funds Management, Agri Investor and Secondaries Investor. Its PEI 300 is an annual ranking of the “300 biggest private equity groups” worldwide based on how much capital they have raised for investment in the previous five years.
B2B information. Betaville are reporting that the Glass’s Guide of automotive prices is coming back to market, with its owner Autovista (formerly EurotaxGlass’s) being sold by Hayfin Capital. The rumoured price of £250m would be more than twice the annual revenue for the company whose Eurotax, Glass’s and Schwacke brands have digital-only services all over Europe. The UK-based company, whose CEO is Lindsey Roberts (ex Informa director) has changed private equity ownership three times in the past 10 years as a result of debt pressures and restructuring.
Magazines. Meredith’s second round auction for the sale of Sports Illustrated, Time, Fortune and Money draws to a close next week. Ari Emanuel’s William Morris Endeavor is said to be in the running to buy Sports Illustrated which (unlike the other Time Inc legends) is said to have made profits of some $13m last year. Meredith was once said to be looking for up to $200m for each of the magazines but is getting real now that due diligence is underway. Investment banker Michael Loeb is said to be looking at Fortune and Money – he is the son of the legendary magazine editor Marshall Loeb, who previously edited both of them. Other names in the frame include: Jay Penske at Penske Media, Jimmy Finkelstein, owner of The Hill, and Liam Lynch, of venture capital firm Studio VC. Is there a chance of a wild card bid for Time magazine, the ultimate media trophy? Jeff Bezos, Laurene Powell Jobs, and Warren Buffet, are you there?
Exhibitions. UBM (now part of Informa, the world’s largest exhibitions organiser) has acquired a 70% economic interest in the Shanghai International Franchise Exhibition (“SFE”) organised by Shanghai Exhibition-Conference Ltd (SEC) twice a year since 2005. SFE is one of the largest franchising events in China with 221 exhibitors with over 450 brands and 50,261 visitors in the spring 2018 event. SFE’s exhibitors are mainly in the food, beverage and retail sectors.
B2B information. Warburg Pincus agrees, to acquire Supplier Assessment Services, which provides third party pre-qualification and health and safety accreditation services in the UK, from Capita plc. Supplier Assessment Services includes the Constructionline and Acclaim portfolio of products and services. Terms not disclosed.
B2B information. Private-equity firm Genstar Capital have agreed to acquire DrillingInfo Holdings Inc., the Austin, Texas-based software, data and analytics business, from Insight Venture Partners for an undisclosed price. Insight will retain a significant minority stake in DrillingInfo which itself has made more than 10 acquisitions, including the purchases of GlobalView Software, Oil-Law Records Corp., DataGenic Ltd. and Pattern Recognition Technologies Inc. since CEO Jeff Hughes was appointed in March 2016. Its most recent deal was the acquisition of 1Derrick and PLS Inc.’s research and database business which focus on the oil and gas transaction market. DrillingInfo serves over 3,500 companies globally from its Austin, Texas, headquarters, has more than 675 employees, and claims to be the leading SAAS data and analytics company serving the oil & gas industry.
Broadcast-streaming. Disney upped its offer for the majority of 21st Century Fox by a massive $20bn to $71.3bn, significantly more than the $65bn rival offer from Comcast. Disney also moved from its original all-stock deal to one with nearly $36bn in cash. Most observers are predicting this is a knockout bid from Disney which, like Comcast and all other broadcasters, is hungry for the content, studio deals and platforms with which to get stuck into global streaming and rein in Netflix before it is too late. If Disney wins this battle, will Comcast (which once wanted just to buy the 40% Fox-owned Sky TV cable and satellite network in the UK, Germany and Italy) bid to acquire ITV, the UK’s largest free-to-air commercial network which also has an enviable production group. If Disney gets Fox/Sky and Comcast snares ITV, Brits will start to believe the dark media predictions that soon they will only be watching US programmes on US networks. The sideshow to watch is what will the Murdoch family do with the Fox News, Sports and US TV stations they will extract from 21st Century Fox when (either) deal goes through? Is a ‘New Fox’ merger with News Corp (which still has a lot of shareholders in common, a legacy of the post-phone hacking split with Fox) still the most likely outcome? So the Murdoch brothers will still have a sizeable, global family business…?
B2B information. Acuris, the 19-year-old fast-growing company (formerly owned by the Financial Times and previously known as MergerMarket and now 70% owned by BC Partners, 30% by Singapore’s GIC), is a leading provider of global M&A data and research. It was acquired by the FT for £100m in 2006, sold to BC for £380m in 2013 and was valued last year at £1bn in GIC’s 30% deal. Its acquisition of the SparkSpread energy industry M&A service seems a logical bolt-on but may represent a broadening of the Acuris strategy to cover some vertical sectors currently best served by specialist services. Terms not disclosed.
B2B Information. Farmer’s Business Network offers a data network, so members can access farm analytics and agronomic advice to support its online, digital, independent farm economy. where members can buy farm chemicals and seeds, obtain credit and financing as well as find buyers who want to buy directly from farmers. Nebraska-based AgriSecure helps promote more large-scale organic farms that produce corn and soybeans, the largest U.S. crops. Now, there’s an idea or two for AgriBriefing (see this week’s MediaDeals) Terms not disclosed.
B2C digital. Dating conglomerate Match Group, of Dallas, Texas, which owns 45 dating properties including Tinder, OkCupid, Match, and Plenty of Fish, has acquired a 51% stake in Hinge, an app that was designed to be a more welcoming antidote to Tinder in which users could only see those potential matches who shared a mutual Facebook friend. Hinge users can answer three questions about themselves, connect their accounts to Instagram, and also upload multiple photos, making the Hinge experience more like a full-fledged online dating site. The deal helps Match to err cover all bases. Terms not disclosed.
B2B information. Nasdaq-quoted TheStreet, Inc., a leading financial news and information company, has sold its RateWatch business for $33.5m to ratings group S&P Global. RateWatch, which is based in Fort Atkinson, Wisconsin, provides more than 4,200 bank and credit union clients with a deposit and loan rate database covering 100,000 locations and dating back 20 years. RateWatch has 60 employees and 2017 revenues of $7.7m. It was acquired by TheStreet in 2007.
News. The Wilson Times, a daily newspaper in Wilson, North Carolina, has acquired the Spring Hope Enterprise, a weekly community newspaper. The Spring Hope Enterprise provides local news coverage of Spring Hope, Bailey, Middlesex, and adjacent communities. Terms not disclosed.
B2B information. Dallas-based MedCareers Group, Inc., parent company of the online professional network Nurses Lounge, will acquire B2B e-commerce player The 4Less Corp., an e-commerce auto parts sales company that – in just three years – has grown into one of the largest online sellers of Jeep, Truck and SUV suspension systems and related accessories targeting direct-to-consumer and repair businesses, principally in the US. Its LiftKits service had first-year revenues of $2.4m in 2015, which grew to $6.8m last year.This year, revenues bare forecast to reach $9m. The model B2B service owes its success to easy-to-follow “how to” instructional videos filmed in their Las Vegas installation centre.
Magazines. Final bids for the legendary but loss-making former Time Inc magazines Time, Sports Illustrated, Fortune and Money are due in two weeks. Meredith Corp is said to be expecting up to $800m for the magazines, which are expected to be sold separately to prospective buyers including: sometime rivals Jay Penske (Variety+ Rolling Stone) and Jimmy Finkelstein (Hollywood Reporter+ The Hill) who are both believed to want Sports Illustrated and possibly Time or Money too. Other individual bidders are going for Money+ Fortune together or Time magazine alone, while several private equity firms are thought to be the only bidders for all four magazines together. But, since Meredith insiders have hinted that there are up to 10 separate bidders still in the race, there may be a number of trophy investors including Len Blavatnik and Ynon Kreiz who – like Edgar Bronfman and Rupert Murdoch – once bid for the whole of Time Inc. There seems plenty of scope for surprise bids and – perhaps – big disappointments on price.
Across the Atlantic, that’s also the expectation at the former Time Inc UK, where the company (now known as TI Media) is expected to focus strongly on its mass market and major brands (especially weeklies and TV listings) and sell-off the long tail of special interest magazines. But prospects for a quick deal with the resurgent Future Plc, the UK’s largest specialist mag-media company, seem to have collapsed. So the only recourse may be a piecemeal sale of at least 10 of the company’s 40 magazines.
TI Media may also have dropped out of the bidding for Dennis Publishing, the livewire company founded by the late Felix Dennis whose key brands include: The Week (US and UK), Buy-a-Car digital, AutoExpress, Evo and ComputerActive. The bidding may now be down to private equity firms and, from the ranks of media companies, perhaps only Hubert Burda Media. It is 18 months since the Munich-based publisher acquired the UK’s Immediate Media (publisher of the listings weekly Radio Times, Good Food, and Top Gear). The privately-owned, 115-year-old Burda has €2.7bn revenues (increased by 150% in the past 20 years), some 600 brands, with 185m users, 500m paying consumers and 12,000 employees in 20 markets around the world. It may be set to become the UK’s second largest magazine-media company. Context: How Meredith captured Time Inc
Broadcast-streaming. The $85.4bn bid by AT&T for Time Warner has been unconditionally approved by a federal court in Washington. This embarrassing defeat for the US Department of Justice (which opposed the deal) is expected to pave the way for a spate of mega-mergers in the USA (see Comcast story) as digital companies and broadcasters alike chase the content and outlets they will need in order to compete with Netflix in global streaming services. That’s why the vibrations from the AT&T-TimeWarner deal will be felt right across the TV world, starting in the UK where US investments are everywhere. Fox owns Sky, Viacom owns Channel 5, and Liberty Media owns Virgin Media. Liberty also has a 10% stake in ITV which itself is rumoured to be ready to buy a share in the BBC’s pay TV network UK TV, which is jointly owned by another US broadcaster – Discovery.
Broadcast-streaming. In the wake of approval of the AT&T bid for Time Warner, Comcast have wasted no time in tabling a higher than expected $65bn all-cash deal for 21st Century Fox. This offer is nearly $13bn higher than Disney’s $52.4 bn all-shares offer. Comcast has agreed to match Disney’s offer to pay a $2.5bn termination fee if the deal is blocked, and in addition will pay the $1.5bn fee that 21st Century Fox would owe to Disney if it walked away from their deal. Just to confuse matters, Comcast has already bid to acquire Sky TV (owned 40% by Fox). Comcast and Disney both want 21st Century Fox to spin-off to existing shareholders “New Fox”, which would retain 28 US TV stations, Fox Sports and the highly-profitable Fox News.
It is all yet another battle for the content libraries, studio deals and channels that will enable traditional broadcasters to chase down Netflix whose $8bn content budget in 2018 makes this no easy task. Disney’s plan for its own streaming network in 2019 is well-advanced though it had been assumed that it might instead relaunch the US domestic Hulu (which it will control if it buys Fox). But we might be more sure that – if Disney is outgunned by Comcast – it will go for Netflix itself and develop a multi-channel global streaming network which really might then become unstoppable. But it will be a long hot summer in broadcast-streaming deals and everything will be hard-fought. Seconds out, round two.
Events. London-based exhibition and conference organiser CloserStill Media has acquired a majority stake in the US-based Learning Conference from Masie Productions, for an undisclosed sum. The event, which attracts around 2,000 delegates and 40 sponsors focused on the use of technology in corporate training, was founded more than 10 years ago Elliott Masie, who is credited with coining the phrase “e-learning”. The JV between Masie and CloserStill is expected to lead to international diversification for the Learning brand. CloserStill is a fast-growing, much-awarded exhibitions business, focused on technology and healthcare. It operates almost 40 exhibitions in the UK, USA, France, Germany, Singapore and Hong Kong and including The Vet Show, The Pharmacy Show, The Dentistry Show, CloudExpo, DataCentre World, and Learning Technologies. It has annual revenues of some £40m and industry-best EBITDA margins of almost 50% and prodigious annual growth rates. The go-go company was created by media veteran Phil Soar, one-time CEO of the former Blenheim Exhibitions which soared in the 1990s before being acquired by UBM. CloserStill, (now part-owned by Inflexion private equity) is 10 years old and looking ready for a big deal – as buyer or seller. Context: Reed Exhibitions may be sold
Events. UBM (now owned by Informa, the world’s largest exhibition organiser) has acquired the annual healthcare exhibition ExpoMed from LiveMed in Mexico and Live Healthcare in Brazil from founders Dr. Vitor Assentuno and Dr. Raphael Gordilho. The terms of the transactions were not disclosed. ExpoMed, in Mexico City earlier this month, attracted 8,000 buyers and 342 exhibitors.
Events. UK-based Quartz Sequoia Events, organiser of Elevate, has announced the acquisition of Elite Sports and COPA from Prysm Group, extending its existing portfolio within sport, fitness and health. The shows claim a combined total of more than 8,000 visitors and 300 exhibitors. We couldn’t find a web site for Quartz Sequoia Events.
B2B information. The UK’s Competition and Markets Authority might block marketing and analytics consultancy Ebiquity’s proposed sale of its advertising intelligence division AdIntel to the $7bn-revenue Nielsen in a £26m cash deal announced in April. The £90m-revenue, London-quoted Ebiquity and Nielsen now have until 20 June to offer up remedies to the competition concerns. In the absence of appropriate remedies, the CMA will launch an in-depth phase 2 investigation, which might just put everyone off – especially since the proceeds would have all but paid-off Ebiquity’s £30m debt. It was that kind of sale. Recent musings by cashed-up Martin Sorrell about his ambitions for analytics and data could just point towards a bid for the £33m-market-cap Ebiquity, a clever company, albeit one which is too sub-scale to be spread across 90 countries. It claims to provide services to 80 of the top 100 global advertisers. But last year’s flat revenues were the latest wobble. The 21-year-old company’s CEO brushed away the fears with “We achieved important milestones on our multi-year transformational journey…. to become the preferred, independent advisor to marketers at world-leading brands. We have a clear, focussed and differentiated destination and are implementing the relevant changes.” Sorrell and anyone’s grandmother would have seen right through that flim-flam – as have investors who have halved Ebiquity’s share price in the past 12 months. Time for Sir Martin’s first post-WPP deal?
B2B information. WebMD Health Corp (owned by Internet Brands) has acquired New York-based, 50-year-old Jobson Healthcare Information, a provider of professional healthcare media whose print and digital brands include MD/alert, Pharm/alert, US Pharmacist, 20/20 Magazine, Review of Optometry, and Review of Ophthalmology. No financial terms were disclosed. The California-based Internet Brands (owned by investors KKR and Temasek) is an interesting B2C and B2B digital media-software company primarily focused on four verticals: health (Officite, DemandForce), automotive (Autodata, CarsDirect), legal (Nolo, Avvo) and travel (Fodor’s, WikiTravel, CruiseMates). But it also has a long-ish tail of digital brands outside this neat profile. Its consumer sites claim more than 250m users. The company was founded in 1998 as CarsDirect. com. It IPOd as Internet Brands in 2005, was acquired by Hellman & Friedman for $640m in 2010 and sold to KKR four years later for more than $1bn. It now employs some 5,000 people in 30 locations worldwide.
B2B information. LDC, the private equity arm of Lloyd’s Bank, is investing £31.8m for “a significant minority” shareholding in NBS, the commercial arm of the Royal Institute of British Architects (RIBA). NBS is a 40-year-old, market-leading provider of technology, content and data to the architectural, engineering and construction industries. Based in Newcastle, NBS employs more than 200 people and had a 2017 turnover of £20.5m. You have to assume that what RIBA described as “a fantastic deal” for its architect members is the first stage in an eventual sale of NBS.
Books. US publisher Grey House has acquired H.W. Wilson’s Sears List of Subject Headings from EBSCO Information Services after being responsible for the print editions for some years. Now in its 95th year of publication, Sears List of Subject Headings has served the needs of small and medium-sized libraries since 1923, suggesting subject headings and sub-headings to use when adding new titles to their collections. Terms not disclosed. EBSCO is the leading US provider of research databases, e-journals, magazine subscriptions, ebooks and discovery service for libraries.
Broadcast-streaming. Amazon has acquired rights to show 20 English Premier League (EPL) soccer matches in the UK for three years from 2019. The matches will be available “free” to Amazon Prime’s UK members (who pay £79 per year membership fee). EPL coverage in the UK is still dominated both by BT Sport and Sky TV (the cable/satellite network which originally soared on the back of its ground-breaking live coverage). But the departure of BT’s CEO Gavin Patterson may signal a pulling back from the telco’s so-expensive foray into live soccer. Arguably, it succeeded only in driving up the prices both for it and Sky. On the other hand, the Amazon deal signals a new era in which advertising-free streaming services increasingly compete with traditional broadcasters to screen live sport. It is assumed that this trend will accelerate during the next few years with the likely sale of the Fox-controlled Sky either to Disney or Comcast, both of which have medium-term ambitions to challenge Netflix as global streaming networks. Earlier this year, Amazon outbid Sky to win exclusive UK rights for men’s tennis world tour matches in a reported $40m deal. And, in the US, it is paying the NFL $130m to screen American football matches on Thursday nights for the next two seasons. The scale of these deals and their traditional significance to broadcast audiences seem certain to hasten the tipping point for online viewing. We should expect Netflix too to start spending some of their huge content budgets on live sports. It’s premature to call the end of live sport on network television, but these streaming contracts will further drag down broadcast audiences – and advertising revenue.
Broadcast-streaming. The Comcast bid has been waved through by the UK regulat0r, and Fox’s offer to sell Sky News to Disney has been deemed sufficient to address Murdoch issues around media plurality involved in a Fox acquisition of the 60% of Sky it does not already own. This paves the way for a bidding war. Fox’s current bid of £10.75 a share values Sky at £18.5bn, while Comcast has tabled a competing offer of £22bn. But, then, there’s the larger game of bidding for the 21st Century Fox parent. Will the ultimate winner be Disney (cool with US regulators) or Comcast (more problematic)? You may be bit confused by the permutations e.g. if Disney wins, the Murdoch family not only bags $60bn of shares but keeps the highly-profitable Fox News and Fox Sports. You should settle for the certainty that – by end-2018 – Fox and and Sky will be committed to new ownership, possibly separately, but most likely together. And the brand of Disney’s planned Netflix killer for 2019 will be either Sky, or Hulu (which it would control if it buys Fox, or Disney itself. It will be a long hot summer.
B2C Digital. German-based legal-tech company Anwalt.de Services AG (which acts as a mediator for clients seeking legal advice and lawyers offering their services) is acquiring FragRobin, an online platform that advises consumers on family, employment, tenancy and consumer law issues, informs about legal claims and automatically supports them in their search for the right lawyer.
B2B information. New York-based Dataminr, a startup that analyzes public data about events in real time, has raised $221m in new funding. The company analyzes data using AI and machine learning in order to discover events and breaking information “long before it’s in the news” for clients in 70 countries across sectors including corporate security, finance, government and PR. Dataminr previously raised around $180m, including a $130m round led by Fidelity in 2015. Other shareholders include IVP, Venrock, Wellington Management and Goldman Sachs.
Education. The US-based 2U public ed-tech company that partners with leading non-profit colleges and universities to offer online degree programs, has raised an acquisition war chest of $331m, which it will use to build on its acquisition of GetSmarter, which it acquired for $103m in 2017. The company, which supplies partner universities with a cloud-based software platform and coursework design, has revenues of c$290m but is still loss-making. 2U was founded in 2008 by John Katzman (founder of The Princeton Review) and CEO Chip Paucek (former CEO of Hooked on Phonics).
Magazine-media. Bauer Media Australia has acquired Inside Out, Country Style and HomeLife from News Corp Australia to add to its portfolio of homes brands, Real Living, Australian House & Garden, Belle and Homes to Love. Terms were not disclosed. News Corp’s remaining magazine-media interests in Australia are largely centred on food. The deal represents a modest return to portfolio growth for Bauer which acquired the former ACP Magazines from CVC private equity for some A$500m in 2012. Bauer had a turbulent time wrestling with losses and magazine closures. But what remains Australia’s largest magazine-media group has settled down under the steadying hand of Paul Dykzeul, Bauer’s fifth Sydney-based CEO in six years. Bauer Media Australia is a subsidiary of a fifth generation, Hamburg family-owned business which owns more than 600 magazines and 100 radio and TV stations in 17 countries. In 2016, it had a global turnover of €2.2bn.
Magazine-media. The UK’s Haymarket Media Group has announced the sale of Stuff magazine to the privately-owned, £20m-revenue Kelsey Media. The deal follows Haymarket’s sale of What Hi-Fi?, FourFourTwo, Practical Caravan and Practical Motorhome to Future earlier in May. The divestments seem to represent the continuing portfolio rationalisation of the privately-owned, magazine-centric Haymarket after its 2016 financial rehabilitation, courtesy of a major property divestment. The company had revenues of £90m in 2016-17.
News. Groupe Lexis Média inc. has acquired L’Avantage votre journal (Rimouski), L’Avantage Gaspésien (Matane) and L’Avant-Poste (Amqui) from Canada’s largest printer TC Transcontinental. This adds to the sale of 12 earlier titles completed in late 2017. Terms not disclosed.
News. Long-established UK regional news group Iliffe Media is set to acquire the Newark Advertiser and its associated website and publications, including the Newark Trader, based in Newark, Nottinghamshire. Iliffe, which publishes the award-winning Cambridge Independent, is a serial consolidator, having acquired 13 titles from the strapped Johnston Press, and the whole of KM Media Group in 2017. It previously sold off its core regional newspaper group to the DMGT-led Local World, now owned by Reach Plc (former Trinity Mirror) which itself is busy digesting the Express newspapers (and OK! magazine) bought from Richard Desmond’s Northern & Shell. A lot of UK newspaper activity but still nothing of the private equity gold rush underway in the US. Perhaps that’s coming.
B2B information. Vora Ventures, a US-based private equity firm specializing in building B2B information technology companies, today announced that it has acquired ShakeDeal, the Indian B2B marketplace for sourcing industrial goods and raw materials. Terms not disclosed.
B2B information. Warburg Pincus private equity has acquired a controlling stake in Reorg Research, a bankruptcy analysis and deal intelligence start-up. The deal is rumoured to value Reorg — which expects 2018 operating profit of some $20m — at between $375m to $400m. In just five years, the privately-owned, US-based Reorg Research has become a leading information provider on distressed debt and leveraged finance. It’s a clever mix of tech that scrapes legal filings along with analysis and original reporting from a 100-strong team of journalists, former lawyers and bankers in the US and UK. Reorg publishes 50-100 articles per day, and has nearly 500 subscribers who pay annual fees averaging some $100k to learn what their experts find online or by working the phones. Research data is hot. The Reorg deal coincides with the Hearst-owned Fitch Group’s acquisition of Fulcrum Financial Data, a rival distressed-debt service (in MediaDeals this week). In 2017, BC Partners sold a 30% stake in the 18-year-old Acuris, publisher of Debtwire and Mergermarket, for almost the same as the £380m price it had paid Pearson for the whole company just three years before. Blackstone private equity is currently buying a 55% stake in Thomson Reuters Financial & Risk for $17bn in a deal which will split the news service from the financial and risk business which had been brought together in the 2008 merger of Reuters and Thomson Corp.
B2B information. The UK-based, privately owned CRU Group has acquired the 10-year-old US-based Steel Market Update Steel Summit conference (which last year had 600 attendees), training and newsletter business. Terms have not been disclosed. The £28m-revenue, 49-year-old CRU provides global economic research, consultancy and events for customers in mining, metals and fertiliser commodities. It is a key provider of steel analysis and prices. CRU has offices in the UK, US, Chile, China, Singapore, Japan, India, Brazil and Australia
B2B information. The Hearst-owned Fitch Group has agreed to acquire Fulcrum Financial Data, a provider of leveraged finance and distressed debt analysis, news and data, from the tech-specialist private equity firm Leeds Equity Partners. Fulcrum’s products include: Covenant Review, LevFin Insights, CapitalStructure and PacerMonitor. Financial terms of the deal were not disclosed, and completion is subject to regulatory approval. Fitch issues grades on bonds and other assets based on their credit risk. It is one of the big three credit-ratings firms, along with S&P and Moody’s. But it now generates more than 20% of its revenue from outside the ratings business, including the provision of fixed-income products and services to the global financial community. Fitch is the largest profit-maker in Hearst Corp which became the sole owner this year by buying the remaining 20% stake for $2.8bn from financial-services company Fimalac SA. Hearst, which bought its original interest in Fitch in 2006, increased its holdings to 80% in 2015. Although best known for its magazines and newspapers, Hearst Corp’s profits are increasingly derived from its growing business and professional digital media in healthcare, automotive – and finance.
Advertising. It’s only weeks since the resignation of Sir Martin Sorrell from WPP, the world’s largest marketing services company he created 33 years ago. Sorrell is investing £40m of his own cash in the reverse takeover of a UK quoted shell company called Derriston, which he promises to turn into “a new multinational communications services business”. The stunning comeback is said to be supported by Schroders, Toscafund, Lombard Odier, Milton and RIT Capital Partners, which are believed to have committed an initial £150m for acquisitions. The company is being renamed S4 Capital but there are few clues about its strategy beyond the assertion that “There are significant opportunities for development in technology, data and content.” WPP’s longterm success was based on offering a wide range of high-quality but separate marketing services under the one roof. But that approach has increasingly been under attack from new-wave startups, large consultancy firms like Accenture, and cost-conscious clients who want to be much more involved in marketing. The digital disruption of traditional media has complicated everything for the advertisers who have been funding it. The UK advertising news brand Campaign took a neat swipe at this week’s news: “Whatever one might say (and people have) about his legacy, he is an astute businessman – arguably the most accomplished of his generation (there is a delicious irony for those who tried to leave WPP during Sorrell’s reign that he himself left without a non-compete agreement in place). All of which suggests it’d be foolish to bet against him. Whether he is capable of reinvention is another matter.” We can safely assume two things about S4: its first M&A will come quickly; and the company will be anything but a re-creation of WPP, perhaps more of a consultancy. Might Sorrell even be exploring some kind of virtual group of collaborating businesses, a federal structure with which to attack companies like – WPP? The man who transformed the global advertising business has never believed in standing still. Just wait.
News. The Nasdaq quoted, Chicago-based media company Tronc Inc. (formerly known as Tribune Publishing) has acquired Virginian-Pilot Media, which publishes Virginia’s largest daily newspaper, for $34m in cash. The acquisition, from Landmark Media Enterprises, includes The Virginian-Pilot, PilotOnline.com and Pilot Targeted Media. The newspaper serves communities including Norfolk and Virginia Beach, the state’s largest city. Tronc’s other daily news brands include some of America’s best known, notably the Los Angeles Times, New York Daily News, the Baltimore Sun and the San Diego Union-Tribune. Before the Virginian-Pilot deal, Tronc acquired BestReviews. com but failed to net the Palm Beach Post and Palm Beach Daily News, which were bought from Cox by Gatehouse Media for $49m. But Tronc is both a buyer and seller of major news brands. Next week, the company’s one-time vice chairman is expected finally to complete his much-delayed $600m acquisition of the Los Angeles Times and San Diego Union-Tribune. No wonder observers are confused about the company’s strategy in the two years since Tribune became Tronc. That’s why many are predicting that it’s only a matter of time before Tronc itself is sold.
News. Freeman Webb Co, a privately-owned Nashville real estate company, has purchased the alt-weekly Nashville Scene and its sister publications, the Nashville Post and nFocus. The deal ends months of speculation over the future of the SouthComm Inc publications. Transaction terms were not disclosed. SouthComm is primarily a B2B media company offering print, digital and events to the aviation, accounting, print, security, transport and facilities management sectors.
Magazine-media. Jay Penske’s eponymous media company, which last year paid an estimated $51m for 51% control of the legendary Rolling Stone magazine from founder Jann Wenner, is reportedly investing a further $10m in a July relaunch, with “15% more” journalists and content, including headhunts from Complex Media, the LA Times and Mother Jones. The 51-year-old magazine (whose 49% minority shareholder is the fast-growing Singapore-based music-making site BandLab) is managed by Penske Media Corp whose digital and magazine brands include Variety, Deadline, MovieLine, Women’s Wear Daily, IndieWire, SheKnows, Hollywood Life, Robb Report and Beauty Inc. Jay Penske is seen by staffers as something of a saviour of print for what he did at Variety, with his launch of women’s magazine Muse from the Robb Report, and now with Rolling Stone. The 15-year-old New York-based company, which claims a monthly all-media audience of 180m, is controlled by the founder, digital entrepreneur (and sometime racing driver) who this year sold a minority stake to Saudi Arabia’s Public Investment Fund. That $200m investment (for a stake of some 20%) is expected to lead to larger (and more international) deals by the already highly-acquisitive Penske. Observers also expect a $1bn+ IPO in the next year or two. But, before that, we know who will be at the front of the line if Advertising Age, Folio, New York magazine or almost anything from Condé Nast comes up for sale. Perhaps Meredith’s for-sale Time or Sports Illustrated too?
Events. The Belgium-based, privately-owned Easyfairs is taking over the Building Holland trade fair from Duurzaam Gebouwd. Building Holland is an annual 15k sq m three-day event for the construction and property industries, held at Rai Amsterdam with a reported average of 15,000 visitors and 230 exhibitors. Easyfairs is a multi-format event organiser, active with more than 218 of its own events in 17 countries including China, France, Germany, the UK and the US. It also manages 10 event venues in the Benelux, Germany, and Sweden. Analyst AMR recently named Easyfairs (which employs 752 people and has revenues of €160m) as one of the world’s top 20 exhibition organisers. A fast-growing company to watch.
Context: read our Insight on Reed Exhibitions and the churning world market.
Broadcast-streaming. Pandora, the largest US audio streaming service, has completed its acquisition of AdsWhizz, first announced in March. AdsWhizz’s ad technology products are capable of things like dynamic ad insertion, advanced programmatic platforms, and ad campaign monitoring tools. Last year, the 18-year-old Pandora revealed that 56m of its 81m active users subscribe to the Today’s Country internet radio station and that country music accounted for more than 1.7bn listening hours on the platform in 2016.
Broadcast-streaming. Rapt Media, which was founded in 2011 and raised $12m in funding, offers customers interactive video technology in areas such as marketing/sales, education and HR. Clients include Mercedes, EMC Dell, Alight Solutions, and eBay. Transaction terms not disclosed. Kaltura operates Cloud TV and online video services for thousands of enterprises, media companies, service providers and educational institutions globally and engages hundreds of millions of viewers in home, work, and school.
Research. The UK quoted £110m-revenue research firm YouGov has held a 20% stake in SMG Insight, a sports research agency, since 2010 and is now acquiring the remaining 80%. SMG Insight had generated £1.2m pre-tax profit in the year to 31 March 2018. Cash consideration of £1m is payable at completion, with a further £1m payable in 12 months, in addition to deferred consideration reflecting a 4.25x multiple of EBITDA to be paid over three-years. Total consideration is capped at £21m.
Events. The Linz-based Startup300, which operates as an angel investor network and business accelerator offering services to Austrian startups, has acquired the flagship Pioneers Festival. It annually brings together a global community of 2,500 tech founders, investors, and 500 startups at the 500-year-old Hofburg Imperial Palace in Vienna. Terms not disclosed.
Events. Diversified Communications – the increasingly global B2B events, digital and magazine business – has acquired the 12-year-old The Running Event exhibition, conference, and digital magazine Running Insight, from Formula 4 Media. The US-based Diversified has almost 50 brands, operates over 150 events, 25 digital services, and seven print publications, including: National Fisherman (US), Mumbrella (Australia), and the London Design Fair (UK). The 60-year-old Diversified is owned by the Hildreth family in Maine, US, and formerly also owned radio and TV channels.
B2B information. The new Hong Kong-based private equity firm Aretex Capital Partners is acquiring the Dallas-based Alerian, a provider of energy infrastructure indices and market intelligence, including the flagship Alerian MLP Index (AMZ), which is widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. Over $18bn is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. Aertex was founded in 2017 by two employees of ZZ Capital International. The terms of the transaction were not disclosed.
B2B information. Iovation provides device identity and consumer authentication capabilities, and a digital device reputation consortium, with insight into nearly 5bn unique devices from more than 35,000 leading brands across more than 50 countries. This deal will strengthen the $12.5bn market cap TransUnion’s fraud and identity solutions capability. TransUnion operates in more than 30 countries including North America, Africa, Latin America and Asia. Terms not disclosed.
B2B information. New York-based Ipreo employs 1,700 people, providing information to support capital-raisings. Owned by private equity funds managed by Blackstone and Goldman Sachs, Ipreo’s sale is conditional on regulatory approvals and is expected to complete in the second half of 2018. IHS Markit is a London-based global information provider, listed on Nasdaq, which has revenue of almost $4bn. Its brands include: Jane’s Fighting Ships, R.L.Polk, McCloskey’s and Fairplay.
Broadcast-streaming. Comcast, the world’s largest broadcasting company, confirmed it is putting together a rival offer to Disney. Last year, 21st Century Fox turned down a bid from Comcast citing regulatory concerns. Comcast and Disney are also slugging it out with rival offers for Europe’s largest pay TV network Sky. Meanwhile, the Murdoch family have appointed executives to manage Fox News and Fox Sports, the TV channels which would be omitted from Disney’s acquisition of 21st Century Fox. These moves may well be complicated further if Comcast’s impending bid includes the news and sports channels. It is possible, however, that the Comcast bid for 21st Century Fox is merely a tactic to persuade Disney, ultimately, to allow the Comcast bid for Sky TV while it acquires the rest of 21st Century Fox. Those are the deals are considered most likely to achieve regulatory clearance in the US and Europe.
Broadcast-streaming. Urban One, the largest African American broadcasting company in the US with a market cap of $88m, has agreed to acquire the assets of the radio station The Team 980 (WTEM 980 AM) from Red Zebra Broadcasting, pending FCC approval. In addition, Urban One has also entered into an agreement with American football team the Washington Redskins to ensure continuing coverage of all Redskins games on The Team 980. The privately-owned 38-year-old Urban One aims to be “the most trusted source in the African-American community that informs, entertains and inspires our audience by providing culturally relevant integrated content through our radio, television, and digital platforms.” Terms not disclosed.
B2C digital. In an all Japanese transaction, the 19-year-old social network Mixi, Inc (which has some 20m active users) will sell Diverse, Inc., an online dating business, to IBJ, Inc. Based in Tokyo, Diverse provides marriage partner introduction and dating services, and has developed an online matchmaking platform. Terms not disclosed.
Music. Abu Dhabi’s Mubadala Investment Company is selling its 60% equity interest in EMI Music Publishing to Sony Corporation of America “based on an enterprise value of $4.75bn”. The $2.3bn deal gives Sony approximately 90% of EMI, which becomes a consolidated subsidiary. The remaining equity is held by the estate of former pop star Michael Jackson.
Events. ITE is the £120m-revenue, London-based operator of exhibitions principally in Eastern Europe and Asia. The seven Ascential shows it is acquiring include market-leading UK brands such as the International Spring and Autumn Fairs, Pure, BETT and CWIEME. The largest of these are entrenched giftware trade shows attended by independent retailers (like the former GLM shows now owned by Emerald in the US). But CWIEME is a global franchise in manufacturing and the 33-year-old exhibition show BETT could also go international. In 2017, the acquired shows had revenues of £77.5m and EBITDA profit of £24m. At nearly four times revenue and 12.5 times EBITDA, this is a full price for these cash-generative but mature, no/low-growth B2B exhibitions. ITE has explained that the acquired exhibitions were “scalable” (pushing back on fears of ex-growth). Since it adds some 60% to ITE revenues and makes the UK its largest market, the deal (which is subject to shareholder approval) can certainly be transformative. This is a year of unending exhibition deals and the pivotal nature of ITE’s acquisition was underlined by its just-released first-half financials that showed like-for-like growth in volume and yields for the first time since 2014. If the company’s troubles with its Russian business are truly in the past, it can now concentrate on trying to prove – at the very least – that the International Spring Fair, long one of the UK’s largest B2B exhibitions, can be returned to growth. Success may, of course, just make ITE another target for its larger UK-based peers, Reed Exhibitions and the ravenous Informa. Even the impressive Ascential might be at risk. Its divestment of the UK shows (like that of the 11 profitable but no-growth B2B magazines for less than 4x EBITDA in 2017) is expected to dilute its profits a bit. Investors will be fine with the short-term impact of such strategic purity – providing Ascential is able to use the cash to buy attractive new businesses and to sustain its rapid growth from: the soaring Money 20/20 and the slightly wobbly Cannes Lions festivals, global information group WGSN, newish e-commerce, and the hazy MediaLink consultancy. No pressure.
Context: Ascential breaks out
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