Consumer media. On Monday (19 November), shareholders of Australia’s 177-year-old Fairfax Media are expected to approve its A$4bn ‘merger’ with the Nine Entertainment Company (NEC). What is really an all-share acquisition will bring together the Channel Nine TV network and the country’s most famous newspapers – the Sydney Morning Herald, Melbourne’s The Age, and the Australian Financial Review. The enlarged NEC will reach over 50% of the Australian population and have EBITDA of more than A$500m. The economic heart of the deal is the A$1.4bn Domain property digital (60% owned by Fairfax), a 54% share of one of the country’s largest radio groups (Macquarie Media), ownership of the 1.25m-subscriber Stan video streaming service (launched jointly by Nine and Fairfax), of the hugely dominant Stuff web site in New Zealand, and some fast-growing digital services. NEC will leapfrog News Corp to become Australia’s largest media group. But that is only part of the story. Australia has been producing world class businesses for much longer than the 27 years of continuous economic growth which have created what The Economist recently described as “perhaps the most successful rich economy”. But, even before Australia’s 21st century transformation, its world leaders in retail, distribution, finance, mining and media were products of fierce head-to-head competition in relatively small domestic markets: world champion businesses were created in the heat of competition where only the winners could survive. In media, the ownership concentration helped broadcasters and publishers to achieve higher profit margins than their most of their worldwide peers. Now, it has become one of the first countries to deregulate traditional media with legislation which removed the restrictions that had previously prevented companies owning newspapers, television and radio stations in the same city. It also abolished the rule which had prevented a single TV broadcaster from reaching more than 75% of the population. The legislation effectively recognised the reality of Google-Facebook-Apple-Amazon domination over the traditional companies that had themselves once defined the media market simply by controlling transmitters and printing presses. NEC will now bring together an unrivalled portfolio of Australian media businesses spanning free-to-air and pay TV, radio, video streaming, digital services and newspapers. In characteristic style, the journalistic debate has centred on the impending loss of the Fairfax brand name and the perceived threat to the independence of its shrunken daily newspapers. Fairfax Media has actually been walking wounded for most of the 31 years since one Warwick Fairfax bankrupted his family business by taking it private with hundreds of millions of debt. It took him less than three years to blow his inheritance. In the aftermath of corporate and personal tragedy, the legendary company was fought over by the likes of Conrad Black, Robert Holmes a Court, Tony O’Reilly, Gina Rinehart, Kerry Packer (long-time owner of Channel Nine), and Rupert Murdoch. The debacle seemed to explain Fairfax’s spectacular loss of its much-vaunted “rivers of gold” classified advertising. Three digital start-ups – Seek (jobs), Carsales (cars) and REA (property) – were variously backed by media heirs James Packer and Lachlan Murdoch. The startups rapidly captured the Aussie market but not before being offered to, and rejected by, a complacent Fairfax. By 2012, the news group’s collapsing profitability precipitated the loss of A$2.7bn and 1,900 jobs, and it’s been downhill almost ever since. NEC has been through the wars too. Along with the former ACP Magazines, the TV group was sold to private equity by James Packer in 2006, just months after his father’s death. He decided to concentrate on investment in casinos, and the impatient timing initially worried observers. But Packer and his investors were soon laughing all the way to the bank over a peak-market A$5bn price tag which eventually all but drowned the local operations of CVC Capital Partners. Seven years years later, Nine bounced back with an IPO. And, in 2017, long-promised Aussie legislation dramatically loosened the constraints on media ownership. The reform was not really any kind of far-sighted political vision but the result of decades of not-so-subtle campaigning. Kerry Packer had spent much of his later life being assured by politicians that he would (soon…) be allowed to do exactly this deal. In ways that are difficult to imagine elsewhere in News Corp, Rupert Murdoch’s Aussie newspapers have continually rubbished their closest rival Fairfax and predicted its demise. In 2016, James Packer and Lachlan Murdoch even collaborated in a book prematurely celebrating the “death” of Fairfax. This year’s surprise ‘merger’ was sprung by former Treasury Minister Peter Costello (now chair of Nine) and Fairfax chair Nick Falloon (who had previously been CEO of what is now NEC). The deal is significant, beyond the shores of Australia, because it coincides with a real change in the prospects for traditional media everywhere. The emergence of fake and faulty digital news has had the unexpected consequence of reinforcing the value of traditional news brands among paying audiences and – at the same time – persuading Facebook and Google not to become mainstream content producers. For all the earlier warnings that traditional media had to ‘get’ tech before the tech companies ‘get’ media, it is becoming clearer than ever that the tech companies have (mostly) been warned off. Despite the intense competition among content providers in the nascent video streaming market, it is now easy to envisage two broad types of media business in the future:
- Technology firms funded primarily by advertising, marketing and data
- Content companies funded primarily by readers, viewers and members
The distinction will not, of course, always be so neat and clean, evidenced by the competition in streaming and e-commerce; and few media groups will abandon the search for some advertising revenue. But it seems clear that the best traditional media companies will increasingly find profitable new ways to distribute news, information and entertainment across the whole range of video, audio, reading, experiential media, e-commerce and interactive services. There will be an explosion of cross-media brands that will ease their journey through media convergence. That’s the significance of the NEC deal. However, we can’t assume there is a robust, far-reaching strategy ready to execute. After all, this deal can be paid-for, in the medium-term, just by staff savings and the cross-promotion of Domain, Stan, and Nine Network TV. But NEC can soon be expected to develop a powerful multi-channel approach, on the following lines:
Content: centralised all-media production and commissioning for News, Sports, Finance, Lifestyle, and Entertainment with ‘super brands’ for each category that will appear online, on TV, radio and in print.
Subscriptions: marketed in packages across streaming, payTV, online, and print
Retail: branded e-commerce, information services and events promoted across all media
That strategy would represent a new kind of fluidity for traditional media as it navigates the digital rapids. It can become the inspiration for media groups everywhere when they – and their governments – get up to speed. The future is there.
Magazines. Meredith Corp has agreed to sell Fortune magazine to Chatchaval Jiaravanon, of Thailand, for $150m. The cash price for the former Time Inc print-centric brand is thought to be some 15 x EBITDA which, therefore, represents another dealmaking coup for Meredith just a month after it secured $190m for Time magazine. Jiaravanon’s family owns the Charoen Pokphand Group (CPG), a broad-based international conglomerate and one of Thailand’s largest industrial groups. Fortune’s print business has been declining sharply and its 2018 ad pages are said to be 25% down on last year. But digital advertising and conferences are reported now to account for more than 60% of the $100m revenue. Now, what can Meredith get for the other two former Time Inc magazines it is selling, Sports Illustrated and Money?
Broadcast-streaming. Disney is in talks with Hearst to sell-off its interest in five European cable channels (History, H2, Crime & Investigation, Blaze and Lifetime) that are part of the larger A+E Networks joint venture between the companies and serve the UK, Italy, Germany, Spain and Portugal. Disney last week agreed to divest the channels as a condition of receiving European Commission approval for its acquisition of 21st Century Fox which includes the National Geographic channels. The European condition is one of the final barriers to the Disney acquisition of Fox, which has already been approved in the US on condition that it divests Fox’s 22 regional sports TV stations. If the deal proceeds as expected, it will be interesting to see whether A+E ownership shifts the European priorities of Hearst whose primary business there is currently its London-based magazine-media group, with additional investments in business information and web services. The A+E deal would certainly strengthen the UK’s role as Hearst’s second market after the US.
B2B information. Wolters Kluwer, the €4.5bn-revenue information services group, has acquired eVision Industry Software BV, a global provider of industrial operational risk management software, for $145m plus earn-out. eVision is a global leader in industrial operational risk management software for the oil & gas, chemical, and pharmaceutical industries. It serves five of the oil & gas majors and is expanding into chemicals and pharmaceuticals. eVision recorded revenues of $25m in 2017 and is expected to achieve double-digit revenue growth in 2018. While its on-premise software remains in strong demand, future growth is expected to be driven primarily by recurring revenue from its cloud-based offerings. Up to $35m in additional consideration is linked to performance.
B2B information. Infomedia, the 30-year-old Australian listed provider of SaaS solutions to the parts and service sector of the automotive industry, has agreed to acquire the automotive data solutions company Nidasu. Transaction terms not disclosed. Infomedia supplies online parts selling systems, publications, data analysis and information research for the automotive and lubricant industries.
Magazines. Penske Media Corp, of New York, is acquiring Art Media Holdings, parent company of the magazines ArtNews, Art in America, and Antiques, from art collector, investor and philanthropist Peter Brant. The price is said to be between $20-25m. The privately-owned Penske, which owns Variety, Rolling Stone, Deadline, WWD, and Robb Report, this year secured a $200m investment from Saudi Arabia. Founder-CEO Jay Penske has been pressured to unravel the deal in recent weeks, as a result of the grisly killing of a dissident Saudi journalist in Turkey. Whether or not Penske unwinds the investment, the controversy might derail his rumoured plans for an IPO in 2019. He might just need some other private investors to fill the gap.
Magazines. Intermedia Group, of Australia, has bought a majority stake in the Sydney-based beauty trade magazine Esprit Magazine. The 14-year-old Esprit was founded by British-born journalist Andrea Ferrari. The deal will add to Intermedia Group’s offering for the beauty trade industry, which currently includes Spa+Clinic and Professional Beauty. Terms not disclosed.
Events. MTV is expanding its live events in the US by acquiring the SnowGlobe Music Festival. The three-day New Year’s Eve festival takes place in South Lake Tahoe, California. This year’s lineup includes Above & Beyond, Diplo, Eric Prydz, Rezz and RL Grime headlining among more than 40 artists. SnowGlobe will also showcase extreme winter sports demonstrations. Terms were not disclosed.
Naspers, of South Africa, is preparing to de-merge Africa’s largest TV group MultiChoice whose DStv was a pioneering digital satellite broadcaster when it launched in 1995. With its Showmax streaming service, MultiChoice provides some 14m subscribers (half in South Africa) with original content and international programmes, including English Premier League football, Formula One, and Game of Thrones. The $3bn-revenue company makes pre-tax profit of $400m and claims to be “one of the fastest growing pay-TV operators globally” so analysts reckon the 2019 IPO may be valued at $6bn. The de-merger was hailed by the Naspers CEO as “a significant step as we continue our evolution into a global consumer internet company.” It’s a simple enough statement from a 103-year-old company which has dramatically morphed from a traditional media group into one of the world’s savviest tech companies with investments in 130 countries. What started as the publisher of a single daily newspaper in Cape Town is now the world’s 65th largest listed company. That phenomenal climb has been propelled almost entirely by China’s largest internet group Tencent, in which Naspers invested $32m (for a 40% stake) back in 2001. Tencent’s market capitalisation is now a whopping $358bn. Naspers’ own value is some $90bn – less than just the price of its 31% stake in the Chinese company. But there is much more to Naspers’ place as Africa’s most valuable company, which is consolidated by its fast-growing operations across digital media:
Classifieds: Its companies OLX, letgo, Avito and Dubizzle have more than 330m monthly active users around the world across 41 markets. Revenues last year grew 47% to $628m.
Retail: Its etail and online travel operations are spread across Central and Eastern Europe, India and Africa, and include eMAG, Takealot and MakeMyTrip. Revenues grew 36% to $2.1bn
Payments: Its PayU is one of the world’s largest online payment service platforms, with operations in 17 markets across Africa, the Middle East, Central and Eastern Europe, India, and Latin America. The online payment systems are made for emerging markets where credit cards and PayPal don’t always work. It also has investments in Kreditech and Remitly. Revenue grew by 58%.
Food delivery: It claims leadership in 40 markets through majority-owned iFood, with minority holdings in Swiggy and Delivery Hero. Total volumes and revenue grew by 65%.
Naspers also has 28% of Mail.ru, the leading Russian internet company, and a range of investments in digital startups. Its stakes in private tech companies include 70% of Brazil’s Movile, a mobile platform for content, food delivery and tickets sales in Latin America. Altogether, Naspers has invested some $10bn in media-tech companies around the world and has built a reputation as a cash-rich investor which gives companies the room to operate independently, takes a long-term view and has global reach. It’s a good partner, has been described as “the biggest tech investor that Silicon Valley ignores,”and makes the majority of its revenue in Brazil, Russia, India, China and South Africa. But the Naspers’ stock market valuation worries investors because of the way the Tencent stake is discounted. Hence the need for some divestments. For all the dominance and high margins of MultiChoice pay TV, its longterm is clouded by the arrival of Netflix (which is expected to have 500,000 African subscribers within 18 months) so the IPO may be just in time. Naspers’ original publishing business, Media24, has no such prospect. It was established as National Press, to produce a Dutch-language newspaper for South Africa’s Afrikaner population in 1905. The company and its publications became unsubtle mouthpieces for the National Party, which came into power in 1948 and instituted the apartheid system of racial segregation that continued until 1994. Twenty-four long years later, Media24 is still South Africa’s leading media group, publishing some 40 magazines, 80 newspapers and a growing range of news and lifestyle digital services. But the print-centric company is now far from the core of the parent company whose CEO always sounds a bit defensive when discussing it. No wonder. Last year Naspers made trading profit of $3.4bn on revenues of $20.1bn. The Media24 contribution was invisible: trading losses of $30m on flat revenues of $374m. It didn’t even merit a mention in the press release. So, the traditional media subsidiary – with all the familiar challenges of print decline and revenue-light digital – is feeling pretty unwanted by a parent company whose focus is miles away. But Naspers’ recent public commitment to invest $300m specifically in South African startups and the dark history of its regretted involvement in apartheid are clues to the sensitivities that may prevent a simple sale of Media24. As the dominant corporation in a country with plenty of growth challenges, Naspers might face a backlash if it risks the future of the newspapers, magazines and digital media that help to define South Africa. It may instead explore the possibility of a creative partnership with an international media company to revitalise Media24. That may even be the brief for the publishing company’s newly-appointed CEO. Potential partners could include two familiar media companies that have successfully diversified: Hearst Corp (with which Media24 publishes South Africa editions of the magazines Men’s Health, Women’s Health, Runner’s World and Bicycling); and Axel Springer with which it launched the local edition of Business Insider earlier this year. Either of those family-controlled companies could inject growth into Media24 through events, video channels, and content-linked e-commerce. They might also welcome the opportunity of wider collaboration across digital media and elsewhere in Africa. Naspers is the cash-rich, hands-off partner that any media company would want. Just watch.
B2B. UK listed company Centaur Media confirmed it is appointing advisers to explore potential asset sales, as part of a downbeat trading update for shareholders. The company, which made operating profit of £6.6m on revenue of £72.6m in 2017, is best known for its marketing-media information services, events and publications including Marketing Week, eConsultancy, Celebrity Intelligence, Creative Review, Design Week, and the Festival of Marketing. It also has strong B2B brands in the legal market (The Lawyer) and finance (Money Marketing, Mortgage Strategy, and Platforum). CEO Andria Vidler (ex EMI and Bauer Radio) has successfully swung the business towards paid-for information and events – and sharply cut operating costs. But the inexorable decline in print advertising have been painful. In 2017, 66% of revenues came from events and paid-for digital content and just 10% from print (halved in two years). The company sold its non-core consumer homebuilding magazines and events to Future Plc for £32m (8 x EBITDA) but even this will dilute earnings. It is assumed that Centaur would most wish to divest itself of relatively minor magazine-led sectors like engineering. But its announcement is likely to attract bids/merger proposals for the whole company. UK favourites might include the Wilmington Group (a merger would create a stronger listed company from two sagging, sub-scale ones); the acquisitive Mark Allen Group (which could use Centaur to reverse itself onto the London stock exchange), DMGT, Incisive Media – and, of course, private equity. Cherry-pick bids for the prime brands in marketing and law might come variously from Euromoney, Penske, Crain, and Bloomberg. Centaur’s exhibitions portfolio (including Subcon, The Meetings Show, The Business Travel Show, and Travel Technology Europe) will also attract bids variously from Informa, Reed Expo, ITE, CloserStill, and Clarion. The 37-year-old Centaur Media employs 564 people. Its share price has fallen 17% in the past 12 months and is some 60% below the IPO price in 2004. That depressed price implies shareholder pessimism about the chances of attractive bids. But the £62m market value is also encouraging would-be buyers to take another look at a company with some well-established B2B brands and the potential for the international expansion that has so far eluded it.
Broadcast-streaming. UK-based software maker Massive Interactive has been acquired by Italian company Deltatre for $127m, in a deal designed to create a rival to global giants Disney and Endeavor in online sports streaming services. The transaction is rumoured to create a joint company valued at up to $1bn. Turin-based Deltatre’s client base includes the English Premier League football, ATP World Tour tennis, and the NFL. Massive, founded in 1996, provides video technology to a variety of broadcasters and entertainment companies, including the BBC and Sony Pictures. It will become a division of Deltatre. The combined entity will have 1,000 employees across 18 offices worldwide, making it one of the largest providers of streaming technologies to sports groups.
News. Donerail Group and newspaper publishers McClatchy Co. and AIM Media are reported to have submitted bids for Tribune Publishing Co.
B2B Events. Access Intelligence—parent company of Folio —has acquired P3C Media, owner and operator of the Public-Private Partnership (P3) Conference and Expo, for an undisclosed sum. Founded in 2012, the three-day P3 Conference and Expo attracts over 1,300 public- and private-sector professionals annually, and has since spawned a series of ancillary summits, including the P3 Airport Summit, the P3 Federal Conference, the P3 Higher Education Summit, and the P3 Water Summit.
Broadcast-streaming. EndemolShine, the London- and Amsterdam-based TV production giant, co-owned by Fox (soon Disney) and PE firm Apollo, has suspended its sale process due to a lack of sufficient interest on terms favourable to the company. Maybe Disney will want to keep it.
News. Two optimistic new media fund-raisings last week are a warning that daily newspapers must abandon their go-slow digital strategies or risk being shredded by a new wave of paid-for services. In the US, the two-year-old The Athletic now has 100,000 subscribers (60% of them millennials) paying some $60 a year for sports content, and renewals are running at 90%. Subscribers get access to in-depth coverage of most major sports in the US and Canada. Under the slogan “Fall in love with the sports page again”, it concentrates on high-quality, low-volume insightful journalism (it has almost 300 staffers) backed by hundreds of enthusiastic reader-contributors. It’s a timely reminder that Jessica Lessin’s approach with The Information (2-3 tech business stories daily for $500 subscribers) can work even on a more consumerist stage where there is seemingly quite enough content already. The Athletic incentivises its journalists to write content that will bring in more subscribers – and gets readers to rate everything they read. Now it’s raising $70m from top tech investors who are falling over themselves to predict a Netflix-like future for the service. Across the Atlantic, James Harding a former editor-in-chief of News Corp’s The Times and the BBC has raised backing from some wealthy friends and crowd-funding to plan the 2019 launch of Tortoise Media. It will be a “slow” news service which will not cover every news story and will not attend press conferences, but will “take time to see the fuller picture, to make sense of the forces shaping our future, to investigate what’s unseen”. Under the slogan “Slow Down, Wise Up”, Tortoise plans to offer three products: A Daily Edition on smartphones, with five key pieces, breaking down the most important issues of the day, in text and video; A daily editorial conference, the ThinkIn (sounds just a bit like the New York Times’ brilliant The Daily podcast); and a quarterly print magazine. It almost doesn’t matter that Harding describes his new venture pretentiously as a cross between TED and The Economist or that UK commentators have drawn flimsy parallels with the US rich list who have been lining up to buy the traditional pillars of journalism. But these and other ventures (more in the US than elsewhere, so far) emphasise that the apparent collapse of newspaper journalism has much more to do with its broken business model than with some lack of interest from would-be readers – and investors. The key to what will surely become an explosion of high-quality, targeted digital “news” services is that they are paid-for and will carry little or no advertising. Therein lies the challenge for traditional news brands. Most newspapers (notably the quality national dailies in the UK) still cannot quite see that their lost lamented advertising continues to impede reinvention of these still-powerful brands. They must adjust to a future based largely (if not wholly) on readership revenues from premium-priced specialist services. But it is their vain pursuit of cheaper and cheaper advertising that drives free and low-price circulations and the insistence on slavishly digitalising the printed newspaper ‘package’. There are notable exceptions but innovation is being stifled by the general reluctance to create digital offerings that really are distinct from (and competitive with) the newspaper tradition. The result is that the these print-centric groups find themselves with strategies which: over-state the value to readers of their traditional news-led ‘package’; limit their appeal to new audiences – and simply invite competition from digital services which don’t have a legacy product to defend. Almost without exception, the new-wave services underline the real requirement for specialist and exclusive content rather than the general news to which most daily newspapers remain so attached and which still account for such a large proportion of their costs. So, every time someone comes up with a digital service covering sport, politics, personal finance or foreign affairs, newspaper executives know they could compete if only they dare risk accelerating the revenue decline of their traditional ‘package’. But ‘disruption’ is all about deconstructing the consumer offer as it was with the attack on music ‘albums’, on bundled cable TV subscriptions, and on no-choice retail banking services. Many consumers are demonstrably willing to pay for journalism. It’s just that they will pay only for what they actually want. There is growing evidence that deconstructing the newspaper ‘package’ can be sustainable. The New York Times now has 400,000 subscribers paying $6.95 monthly for its daily crossword puzzle – some 30% of the full subscription for the whole digital ‘newspaper’. From recent reports that the newspaper now has 4m subscribers – 75% of them digital – you can surmise that the crossword (and also cooking) services really are helping to enhance the value of the whole New York Times subscription as well as attracting those who only want part of the package. Of the 203,000 of new digital subscribers gained by the NYT during July-September 2018, some 60,000 paid only for the company’s cooking and crosswords services. If ever there was a cue for daily newspapers everywhere to start unbundling their best content, surely the New York Times’ crossword is it. In the UK, even now, no media is better placed than the national daily newspapers to provide really strong digital ‘verticals’ on a range of topics from politics to football. Hurry.
B2B information. The UK-based £1.5bn B2B information and events group Ascential Plc has acquired the four-year-old US-based Flywheel Digital, a provider of services to consumer product companies trading on Amazon. The company self describes as “a collection of experienced practitioners focused solely on Amazon. We have spent years deconstructing the Amazon machine to provide your team with actionable insights that translate into sales.” Its 70+ customers mostly comprise large-scale US consumer product companies, and it has 90 staff in Baltimore and Seattle. Ascential is paying an initial $60m plus an earn-out based on revenue for 2019-21 which is expected to pay-out in the range of $47m-$196m. Total consideration is capped at US$400m. In 2017, Flywheel grew its revenue by more than 150% – but delivered pre-tax profit of just $4.8m. Analysts are expecting PBT of some $9m on revenue of c$30m next year. Ascential (which grew out of the former Emap Plc‘s B2B media and exhibitions) is being praised by investors for a robust strategy which has artfully combined the sale of non-core but soundly profitable magazine brands and exhibitions (even at prices which diluted profits) with cherry-picked (and sometimes high-priced) digital acquisitions. As if to reinforce the disciplined mix of organic growth alongside the steady stream of acquisitions, the company last week launched ‘Edge by Ascential’ to provide the world’s leading brands and retailers with e-commerce performance data. In 2019, Ascential Plc is expected to make EBITDA profit of some £135m on revenue of £400m. That 30%+ operating margin (compared with 25% this year) would be the reward for CEO Duncan Painter’s gutsy strategy which sees a once UK-centric group get about 50% of its revenue from the US and only 20% from the UK. Good timing. The next strategic test for Ascential could be to decide whether its high-value information services really fit with its global events portfolio (including the wobbly but huge Cannes Lions and the turbo-charged Money 20/20). Perhaps the soaring price of exhibitions and festivals (up to 17x EBITDA) has already given Painter some ideas about what transformative data-tech businesses he could buy with proceeds that could so nearly match Ascential’s total market value. The equally acquisitive Informa and Blackstone may already be sharpening their pencils.
B2C digital. Germany’s ProSiebenSat.1 TV group has acquired US online dating site eHarmony, in the first significant deal of its new e-commerce joint venture with General Atlantic, the US private equity firm which once helped Axel Springer to build-up its global classifieds business. The Munich-based broadcaster bought eHarmony via its newly-created NuCom division, in which General Atlantic took a 24.9% stake in February. NuCom in turn owns 94% of Parship. eHarmony, which was founded in 2000 in Los Angeles and expects to register 2.8m new users this year, complements ProSieben’s own Parship dating franchise, which is said to be the market leader in Germany. Parship and sister brand ElitePartner claim some 2m registrations a year. The transaction follows through on ProSieben’s push to diversify away from its core commercial TV franchise, where ad revenues are flat amid disruption by Netflix et al. Privately-held eHarmony has raised a total of $113m in two funding rounds, the most recent being in 2004, when it was backed by The services will now expand into the US, Canada and Australia. Financial terms of the deal were not disclosed but it is rumoured to have valued eHarmony at only $85m. Rival Match has a market value of $13.7bn. The 18-year-old listed company ProSiebenSat.1 claims to be the leading German entertainment player, and has a strong e-commerce business: “We want to offer great entertainment – whenever, wherever and on any device. Every day, 45m TV households in Germany, Austria and Switzerland enjoy our 14 free and pay TV channels.” ProSiebenSat.1 claims to generate more than 1bn online video views per month and to invest more than €1bn euros in 120,000 hours of TV programming.
News. Czech investor Daniel Kretinsky’s Czech Media Invest has acquired a 49% stake in Le Nouveau Monde, the principal shareholder of Le Monde, France’s 74-year-old daily (afternoon) newspaper. He has reportedly bought about half of the shares formerly held by Lazard banker Matthieu Pigasse. Terms of the deal were not disclosed. Earlier this year, Kretinsky acquired several magazines from Lagardère, including Elle (most of whose international editions are published under licence by Hearst Corp, of the US) and TV listings magazine Télé 7 Jours. He also owns the French newsweekly Marianne. In the Czech Republic, Kretinsky owns EPH, the largest energy group in Central Europe. Two years ago, he sold 31% of a EPH infrastructure subsidiary to Australia-based Macquarie for $1.6bn. He co-owns the Czech tabloid Blesk, the country’s most widely-read newspaper, and also football club Sparta Prague.
Broadcast-streaming. The 140-year-old US media company E.W. Scripps has agreed to acquire 15 television stations in 10 markets from Cordillera Communications for $521m. The deal will give Scripps a total of 51 stations in 36 markets, reaching 21% of all US households. The acquisition follows a reorganisation of Scripps to focus on TV stations, some 10 years after it spun off the now-listed company Scripps Network Interactive (home of HGTV, The Food Network and The Cooking Channel). Two years ago, Scripps sold its newspapers to Gannett and, more recently, sold-off its remaining radio assets.
B2B information. Legal publisher Fastcase has acquired the Law Street Media legal news platform, working with founder John A. Jenkins, the former President and Publisher of CQ Press, and a team of reporters to evolve the online news platform into an enhanced daily news and analytics hub. When the site is relaunched in 2019, the retooled platform will highlight national and state docket litigation, regulatory developments and state bar news. Transaction terms not disclosed.
Broadcast-streaming. Propagate, the production house headed by Howard Owens and Ben Silverman, has acquired Electus and taken a majority interest in Artists First. Electus is the producer and distributor of series including NBC’s “Running Wild with Bear Grylls,” ABC’s “The Toy Box,” the CW’s “Jane the Virgin,” and Discovery’s “Darkness”, along with production companies Big Breakfast (“Adam Ruins Everything”) and Notional, producer of Food Network’s “Chopped” franchise. The price paid for Electus was rumoured to be around $35m. Electus had bought the interest in Artists Direct (formerly Principato-Young Entertainment) in 2017.
B2B information. Wolters Kluwer Legal & Regulatory has acquired eVision Industry Software BV, a global provider of industrial operational risk management software, for $145m, plus a deferred contingent consideration. eVision provides industrial operational risk management (IORM) software for the oil & gas, chemical, pharmaceutical, and other high-risk and high-precision industries.
B2B information. Randall-Reilly, a leading B2B data company in trucking, construction, agriculture and other industrial markets, has acquired Transportation Data Source (TDS) from trucking pioneer Lyn Simon and TDS co-founder Helen Simon. The TDS acquisition opens up new markets for Randall-Reilly, including factoring, insurance, brokerage/logistics and fleet management solutions. Transaction terms not disclosed.
News. Advance Publications Inc, of New York, has acquired The Esports Observer, a provider of esports business news and events from Bitkraft Esports Ventures network. Advance’s subsidiary American City Business Journals, which publishes Sports Business Journal, had previously acquired a minority interest in The Esports Observer in 2017. Earlier in October, Advance acquired a majority stake in esports analytics firm Newzoo. Transaction terms not disclosed.
Magazines. Hearst Corporation, in the US, has acquired seven weekly news brands from Hersam Acorn Newspapers, in Connecticut. This is the fifth bolt-on newspaper deal in two years by the privately-owned Hearst and emphasises its distinctive strategy. Over the past 60 years (almost half of the company’s lifetime since being founded by W.Randolph Hearst in 1887), the company’s most profitable activity has shifted in turn from newspapers through magazines, television and now to business information. What is the world’s oldest multi-media group was built on the successive fortunes of daily newspapers and magazines. Then, in 1990, Hearst became a 20% shareholder in the Disney-controlled ESPN sports cable network which, alongside other TV networks, have frequently accounted for almost 100% of Hearst profits. The recent expansion into global business and financial information sees Fitch Ratings and medical data services now generating more than 50% of profits. Such shifts have been common enough among media companies. But the difference is that Hearst sticks with its businesses even in decline and its policy of rehabilitating yesterday’s winners seems to pay off. Total revenues last year were some $10.8bn – at least 150% up over the past decade. Although the numbers are bolstered by some chunky acquisitions, Hearst’s consistent growth underlines the enduring success of a media group whose pre-tax profits may now be $1.5bn. For all the disruption of its once-dominant print businesses, the so-versatile Hearst has scarcely missed a beat. Its newspapers may now be one of the smaller divisions but they are doing better than most of their peers. With more than 3,000 employees, Hearst Newspapers publishes 24 dailies and 63 weeklies in Texas, California, Connecticut and New York state, and increased profits for the sixth consecutive year in 2017. Now, Hearst is planning the reinvention of its embattled magazines. It is seven years since it spent $900m on 13 worldwide editions of Elle – just as the international licensing of magazine brands that it had pioneered with Cosmopolitan 25 years before, was coming off the boil. Last year, it paid an estimated $210m for Rodale, publisher of Men’s Health, Women’s Health, Prevention and Runner’s World. But four events in 2018 have set the scene for the coming revolution at Hearst Magazines:
- In January, Hearst Corp CEO Steve Swartz – in his annual letter to staff – singled out the under-performing magazines division, which had declined in profit after four years of modest growth: “Still, the magazine business needs more change.” In the famously collegiate company, this represented a stiff public rebuke for its once world-conquering magazines.
- Hearst Magazines paid $50m to settle a proposed class-action lawsuit accusing it of breaking data protection laws in Michigan. The settlement (and up to $17m in costs) will wipe out much of this year’s magazine profits.
- In June, it was announced that David Carey would be stepping down after eight years as president of Hearst Magazines. He would become titular chairman of Hearst Magazines for a year (while on a Harvard course) but his name quickly started coming off the company’s boards.
- A month later, Troy Young, who has led the digitalisation of the company’s magazine brands since 2013, was appointed to succeed David Carey. He wasted no time in digitalising the top team, but not before bidding his predecessor a tepid farewell: “David has been and will continue to be an important advisor, and I’m happy to have his guidance and institutional knowledge as I take on this new role.”
Twelve years ago, Frank Bennack (longtime chairman and architect of the modern Hearst Corporation) presided over the opening of its landmark Manhattan headquarters by saying it had effectively been paid-for by Helen Gurley Brown, the legendary editor whose revolutionary Cosmopolitan magazine had transformed the company’s profitability in the 1960s. Cosmo once had almost 70 worldwide editions but faltering revenues and magazine closures (the latest in Australia) underline the need even for the monster brand to find profitability beyond print. But traditional media’s persistent challenge is how to compete with digital-only insurgents while trying to defend (or slow the inevitable decline of) still-profitable legacy businesses. Troy Young addressed that conflict head-on by establishing digital teams, separately managed from the print magazines. The claimed digital profitability may have been inflated by discretionary cross-charging for content. But online audiences have almost doubled in the past five years and digital now accounts for one-third of magazine revenues. In the US, Hearst’s 20 magazine-centric brands average more than 1.4bn monthly page views and 15bn annual video views, while attracting 146m social followers and 81m monthly unique visitors on Snapchat Discover. Young’s team launched five new brands on Snapchat, making Hearst the largest publisher on the platform. He also developed e-commerce (mainly through the BestProducts site) and now aims to more than double retail sales to $500m within two years. The revolution has begun, with Young’s decision to bring management of the digital and print teams back together. He is expected also to cut-back the company’s long tail of under-profitable magazines, each with their own dedicated content teams. Nowhere is this more obvious than the UK whose 20 brands (and 740 people) made operating profit of only £5m in 2017. Well over 50% of that profit came just from the venerable Good Housekeeping. Hearst UK is under the microscope in New York also because of its wobbly strategy to staunch the loss of magazine advertising by distributing hundreds of thousands of free copies. The current ABC circulations of the UK company’s seven largest magazines have been padded by an average of 23% of free copies and even Good Housekeeping is 17% free. Steve Swartz’s words are ringing in their ears: “…we need the readers to pay more for the product. And we need to find a way to make digital subscription products work for magazines in the way that they are starting to work for newspapers.” Any new business model for these magazine brands will not be strengthened by print circulations that are hyped with free copies. Troy Young’s appointment makes Hearst Magazines, arguably, the first major group to dare to do the obvious and subordinate print to digital. Early signs that the revolution is working will include some digital-only acquisitions in women’s interest markets in the US and UK, and a telling decision (perhaps in 2019) to change the division’s name to something like “Hearst Lifestyle”. It’s no longer all about magazines.
B2B information. Commodity price reporting agency Argus Media has acquired Integer Research, a London-based provider of market intelligence to the fertilizer, industrial chemicals and wire and cable industries. Terms of the transaction were not disclosed. Argus, which has some 950 staff (50% editorial), and is also headquartered in London, produces price assessments and analysis of international energy and other commodity markets, and offers consulting services and conferences. The company was founded in 1970 by Jan Nasmyth, a former UK Treasury official, as a weekly newsletter called Europ-Oil Prices covering European petro markets. It created the ASCI (sour crude index), which Saudi Arabia now uses to price exports to the US. In 2016, General Atlantic private equity acquired a 52% shareholding in a deal which valued Argus at £1.4bn. The remaining shares are owned by staff. In the year to 30 June 2017, the company had £70m revenue with a 68% EBITDA profit margin. It claimed to have 6,000 customers (mainly subscribers) in 140 countries but was some 75% dependant on the UK and Europe.
B2B information. Northstar Travel Group, of the US, has acquired the nine-year-old UK-based Tnooz (“talking travel technology”) as part of a plan to develop its Phocuswright media. Tnooz will be merged with PhocusWire. Transaction terms not disclosed. Northstar is a B2B information and events company in travel, meetings and hospitality. It claims more than 1.4m monthly uniques through brands including Travel Weekly in the US, Asia and China, Business Travel News, and MeetingNews. It also operates the Burba Hotel Network of 25,000 hotel industry leaders in over 140 countries. Northstar, which is owned by EagleTree Capital, is believed to have had 2016 revenues of $80m with a 24% EBITDA profit margin. The company is independent of the UK’s fast-growing Jacobs Media Group (JMG) which publishes Travel Weekly in the UK and across Europe, as well as The Caterer, Aspire, Connecting Travel, the Cateys and the Globe Travel Awards. The privately-owned JMG now generates almost half of its revenue from events, with its fastest growth outside the UK.
B2C Digital. eBay has agreed to buy the website Motors.co.uk from Cox Automotive for an undisclosed price. Motors.co.uk will merge into eBay’s classified ads site, Gumtree. The deal is expected to be completed by early next year. The combined group will offer more than 620,000 car listings. Current market leader, the listed company Auto Trader is believed to have 500,000 car listings, and has revenues of £300m and operating profit margins of 66%. A big fight looms.
B2B information. Thomson Reuters has agreed to acquire Integration Point, which offers a comprehensive suite of global trade compliance products encompassing almost all industries, geographies and trade programs. This acquisition is in line with its strategy (following the recent sale of 55% of its Financial & Risk division to Blackstone) of investing in its core offerings in the legal, tax, regulatory and media markets. Transaction terms not disclosed.
News. The Arizona-based Times Media Group last week completed the purchase of Glendale Star and the Peoria Times’ owner Pueblo Publishing Inc. Transaction terms not disclosed.
B2B information. Oracle is buying DataFox, a startup that has amassed a company database — currently covering 2.8m public and private businesses, adding 1.2m each year — and uses AI for analysis and business predictions. The resulting business intelligence can be used for a range of CRM-related services including prioritising sales accounts and finding leads. Terms of the transaction were not disclosed but the four-year-old DataFox was thought to be valued at some $50m.
B2B information. Dodge Data & Analytics, a leading provider of market intelligence and analytics to the North American construction industry, has acquired San Diego-based Integrated Marketing Systems (IMS), a provider of Advance Notice public construction opportunities to the architecture and engineering sectors. Transaction terms not disclosed.
Radio / Outdoor advertising. Global Media & Entertainment, the UK’s largest commercial radio company, has paid a reported £450m to acquire Exterion, the £370k-revenue outdoor advertising group which has a 20% share of outdoor advertising in the UK and also operates in Ireland, France, the Netherlands and Spain. It has the advertising contracts for the London underground and rail networks, for mass-transit systems in Newcastle, Liverpool, and Glasgow, and buses right across the UK. The deal follows Global’s September purchase of Primesight and Outdoor Plus and means that, in just four weeks, the privately-owned radio and music group has splashed some £750m to become a 35% UK leader (head-to-head with global leader JCDecaux) in out-of-home (OOH) advertising. The three acquisitions (all from private equity) have almost doubled Global’s workforce to more than 2,000. They highlight the increasingly ambitious strategy of a group which was formed in 2007 by the successive acquisitions of UK radio networks from Chrysalis, GCap, and The Guardian. Those radio deals brought together some of the UK’s most popular broadcasting brands including Capital, Heart, LBC, Classic FM, Smooth and Radio X. They also created an unwelcome profile for the Global boss Ashley Tabor. He’s the son of Michael Tabor, a British tax exile who has amassed a fortune from a smudgy lifetime of bookmaking, horse-breeding and property. Almost 50 years ago, Tabor Sr was banned from all UK racecourses for allegedly paying jockeys for information. Ashley himself attended a 400-year-old British boarding school but left at 16 to work in go-for jobs with radio stations and music companies. Along the way, he claimed the credit for discovering some well-known artistes. He moved into festivals and music publishing, and introduced his father to entrepreneurs like Simon Cowell. That was the spark for the Tabor family strategy to gatecrash the UK radio business. Along with fellow British and Irish gamblers and currency speculators scattered across the tax havens of Monaco, the Channel Islands and the Caribbean, Michael Tabor ponied up some £400m for his son’s leap into UK broadcasting’s big league. The 2007 launch of Global is now credited with the resurgence of the country’s commercial radio, although it did coincide with Bauer’s acquisition of EMAP radio which has led to the German company’s broadcast expansion across Europe. Global’s revenue has increased 34% during 2009-17, and radio has held steady at almost 6% of all UK ad spend during a period when the internet has been gouging almost every other media category. In a country where the tax-funded BBC still gets more than 50% of the radio audience, regulator Ofcom says Global has 22.8m weekly listeners (42% of the whole commercial radio audience) comfortably ahead of Bauer’s 17.4m (32%). Although the stats show that the growth of 35-64 year listeners is camouflage for a steady fall-off in 16-34 year olds, UK commercial radio is in good shape as it celebrates its 45th anniversary. Against all the odds of an economy that was blitzed by the 2008 banking crisis and is being depressed now by the unknowns of Brexit, Global is proving to be a good investment for its sun-tanned owners. In 2017, it made EBITDA profit of £77.8m on revenues of £302.6m (a 26% margin). This might imply a valuation of almost £1bn, especially if radio advertising keeps growing at 5%+ as forecast (it was a market-beating 12% up in the first quarter of 2018). Profits have generally been buoyed by the UK’s 2010 deregulation of radio which relaxed the restrictions on ownership and content – in response to the sector’s previously precarious conditions. So, with end-2017 net liabilities of £350m, Global is one traditional media business that is not disappointing its investors. More so because they own the UK business through a Jersey-based holding company (ultimately owned in the zero-tax British Virgin Islands) which eliminates taxable profits by charging interest rates of up to 15% on their loans. So, the company has continued to declare “a statutory loss” throughout a decade of undoubted success. It does its best to avoid coverage: no media company was ever more media-shy than Global. The tax planning may help to motivate its £3m-a-year charitable fundraising and London’s Global Academy which was opened two years ago by the country’s two most popular Royal princes. But, then, there’s the jarring picture of the low-profile founder paying £100m for the most famous apartment in London. Insiders snipe that Ashley Tabor’s relationship to Global’s main investor is clear from his £4m average remuneration. But the company’s dominant position in UK commercial radio, its slowing growth, and fears of some kind of future tech disruption, has had Tabor searching for future growth options. Like CBS and Clear Channel in the US, in previous years, and HT&E (formerly APN) in Australasia currently, Global has alighted on radio’s potential fusion with OOH, whose enduring appeal has been its ability to reach all consumers. The growth of digital OOH creates the opportunity to augment the advertising with video and live broadcast content including news, sport, weather, and retail. It can also be personalised through interaction with geo-tracked smartphones which themselves account for an important part of the radio audience. It’s easy to understand why broadcasters are so appetized by the potential convergence: “away from home” audiences have geographical flexibility and are reached in a variety of mindsets including at the point of purchase or visit. OOH also enjoys low levels of the “advertising avoidance” that, arguably, has helped to drive younger audiences from traditional media. Advertisers increasingly see digital OOH as a way to connect the dots between what costumers are doing online and on the street. That’s why Ashley Tabor has paid such a high price to be a major player. The £300m that Global reportedly paid for Primesight and Outdoor Plus was some 30x operating profit and almost 3x revenue. And, now, the £450m paid for Exterion is 20x EBITDA. But, unlike Global’s 26% profit margins, these OOH companies struggle to reach double digits, none more so than Exterion which last year doubled its margin to all of 6%. That’s only the start of the worries, because so much of Exterion’s revenue comes from assets that are leased not owned. A single deal with Transport for London may account for 40% of all revenues and it’s only got six years to go before the next auction. It prompts the simple question of whether OOH digital services, in becoming a broadcast medium, might yet lead Amazon, Google, Facebook and Netflix to start bidding for these contracts. Is it just possible that by, diversifying into OOH, Global is effectively inviting into its (so far) undisrupted world, the very digital companies that have monstered every other category of media? Another big gamble.
Consumer digital. News Corp subsidiary Move Inc., operator of realtor. com, has completed its acquisition of Opcity, the US real estate technology platform that matches home buyers and sellers. Opcity has grown its US client base to over 5,000 brokerages and more than 40,000 agents since 2015. Move Inc – with News Corp’s matching REA business in Australia – has consistently been among the best-performing subsidiaries of News Corp, accounting for some 35% of profit but only 10% of revenue. The Murdoch-family controlled parent company has long been best-known for its daily newspapers in the US, UK and Australia, and Harper Collins book publishing. But it has been quietly transforming its operations in Australia where it also controls Foxtel pay TV and, in the UK, where The Sun online has overtaken DMGT’s Mail Online to become the country’s largest newspaper site. Foxtel, whose subscriptions revenue has been falling in the face of competition not least from Netflix, is launching a much-vaunted sports streaming service in March. In the UK and Ireland, News Corp’s Wireless Group operates 30 leading radio brands including talkSport (claimed to be the world’s biggest sports radio station), talkRadio and Virgin Radio. It is easy to believe that the digitally-refocused $8bn News Corp (now divorced from 21st Century Fox which was sold to Disney and Sky TV, acquired by Comcast) could launch further (free or subscription) streaming services, for example in business, travel and politics in various markets.
Magazines. Newsweek Media Group has spun off into two separate companies — the 85-year-old Newsweek magazine and IBT Media. Newsweek will comprise the US print and digital versions of the magazine, as well as the international editions in EMEA and Asia and the website Newsweek.com. IBT Media will consist of the International Business Times, Player.One, Latin Times, Fashion Times and Medical Daily. On the day of the demerger announcement, the New York Times reported the following: Newsweek magazine, the onetime media powerhouse, was at the center of a multimillion-dollar fraud and money-laundering conspiracy, according to an indictment by Manhattan prosecutors that was unsealed Wednesday (Oct.10). Two publishing companies, IBT Media, which owned the magazine, and Christian Media, a faith-based online publisher in Washington, were charged with trying to defraud lenders by pretending to borrow money for sophisticated computing services. Instead, most of the money was funneled back to accounts controlled by the two media companies and their principals — Etienne Uzac, a co-founder of IBT, and William Anderson, Christian Media’s former chief executive and publisher — and unnamed co-conspirators, the indictment said. It said some of the money had been used to cover the magazine’s operating expenses.The men were charged with misrepresenting Newsweek’s financial health and creating a fictitious accounting firm, Karen Smith L.L.P., along with a series of fake financial statements to dupe lenders into putting up millions of dollars in 2015 and 2016. Oikos Networks, a computer company, was also named in the indictment, charged with providing fewer, lower-quality computers than the expensive ones on invoices.
Broadcast-streaming. Blue Ant Media has acquired its fellow Toronto-based factual prodco Saloon Media. Saloon Media’s credits include Mummies Alive and Hunting Nazi Treasure for History (Canada), Smithsonian Channel (US) and Yesterday (UK). CEO Michael Kot, who was with Entertainment One before creating Saloon Media in 2013, says: Kot added: “Saloon’s ambition to reach a wider audience and connect with new global business partners dovetails perfectly withBlueAntMedia’s push to expand content production for world markets. We’re extremely excited to be part of BlueAnt’s growing North American team.” Transaction terms not disclosed.
Events. CloserStill Media, the London-based exhibition and conference organizer, has acquired a majority stake in Focuszone Media, Inc, operating as The eLearning Guild, for an undisclosed sum. The eLearning Guild has a 40,000+ membership community of learning and development professionals in the US and around the world. The Guild operates major conferences and exhibitions, including DevLearn (Las Vegas, Nevada), Learning Solutions (Orlando, Florida), and Realities360 (San Jose, California), conducts research, and has a number of digital publications and online events. The private equity-owned CloserStill has annual revenues of some £55m and said to have industry-best EBITDA margins of almost 50% and prodigious annual growth rates.
Events. Blackstone Group has agreed to buy the National Exhibition Centre Group (NEC), the UK’s largest exhibition venue operator, from LDC, the buyout arm of Lloyds Banking Group PLC. The deal values NEC Group at around £800m. LDC had bought the company from Birmingham City Council for £307m in 2015. Founded in 1976, the NEC owns and operates Birmingham’s National Exhibition Centre, the International Convention Centre and Arena Birmingham. The group also owns the Genting Arena in Birmingham, a ticketing agency and a catering business, and has a contract to run the disused Bradford Odeon, which is reopening as a 4,000-capacity live events venue in 2020. The NEC reported EBITDA profit of £54.7m in 2017 – up nearly 10%. Blackstone expects to triple NEC’s EBITDA from £70m to £200m during the next five years through acquisitions and organic growth of about 5% per year. Birmingham, the UK’s second largest city, hosts the Commonwealth Games in 2022, with four NEC properties the venues for sports such as judo and gymnastics. The deal follows Blackstone’s purchase of Clarion, the UK-US exhibition organiser, for £600m last year. Since then, Clarion has reportedly tripled in size through acquisitions in the US and Asia. It is rumoured to have approached RELX about the possible divestment of Reed Exhibitions, which had been the world’s longtime leading exhibition organiser until Informa’s acquisition of UBM in 2018.
Events. The US quoted exhibition organiser Emerald Expositions Events has acquired Boutique Design New York (BDNY) and related assets from ST Media Group International and Hospitality Media Group. Now in its ninth year, BDNY is a trade show and conference for boutique hospitality design professionals, primarily serving the eastern United States, Canada and Europe. In addition to BDNY, Emerald is acquiring the BDwest and HX: The Hotel Experience trade shows, the Hospitality Match, Senior Lifestyle Design Match and Forum Series events, and Boutique Design, the partner magazine to BDNY. Transaction terms not disclosed. The $440m-revenue Emerald Expositions (incorporating events once owned by Miller Freeman, Nielsen, VNU and GLM) is the leading US-owned operator of B2B trade shows, operating more than 55 trade shows principally across retail, technology and construction.
B2B information. The $800m-revenue CoStar Group, a US-based global provider of commercial real estate information, analytics and online marketplace,s has acquired Realla, which bis claimed to be the UK’s largest public portal in commercial property. Launched in 2016 by founders Andy Miles and Ian Parry, Realla is a free-to-list search engine for commercial property. It displays the largest public index of available commercial real estate in the UK. Realla also offers a software product, called Realbase, which provides a dedicated, all-in-one commercial property marketing & data management platform for agents and landlords. Realla claims over 100 corporate customers across the commercial real estate sector. Transaction terms not disclosed.
B2B information. WebMD Health Corp, an Internet Brands company has acquired prIME Oncology, a provider of independent medical education in oncology. The acquisition expands the global footprint of the business, adding an office in The Hague to those in New York, Paris, and London. Medscape Oncology reaches more than 100,000 active hematology and oncology members worldwide and delivers education to professionals in 191 countries. Transaction terms not disclosed.
Events. US-based Access Intelligence has acquired P3C Media, owner of The Public-Private Partnership (P3) Conference and Expo, the leading education and networking event for P3C leaders from government and industry to discuss infrastructure challenges and innovations in project delivery, procurement, life cycle asset management and solutions. Terms of the deal were not disclosed. Access Intelligence is a privately-owned B2B media and information company headquartered in Maryland, serving the marketing, media, PR, cable, healthcare management, defence, chemical engineering, satellite and aviation markets. Leading brands include PR News, Ad Exchanger, AdMonsters, Cynopsis, Cablefax, Folio:, Event Marketer, LeadsCon, Chief Marketer, Defense Daily Network, AviationToday, Studio Daily; Power, and Via Satellite. Market-leading conferences and trade shows including LeadsCon, AdMonsters OPS and Publisher Summits, The Folio: Show and Experiential Marketing Summit.
Magazines. UniLad has been bought by its rival LADBible after tax debts of £1.5m forced it into administration. The two British online companies are the biggest publishers on Facebook, thanks to their viral videos and keen understanding of how to game the social network’s algorithm. But despite their global scale, the companies’ combined annual revenue is about £25m. LADbible had revenue of £15.3m and pre-tax profit of £3.7m in 2017. The profit was almost double that of 2016. Founded in 2012, LADbible Group said it was “redefining entertainment and breaking news for a social generation. Using all major platforms, we’ve rapidly risen to become one of the web’s most prominent social video publishers.” LADbible said the acquisition of UniLad “makes us the largest social video publisher ever” with more than 120m followers. “In August alone, our combined videos were viewed 4.5bn times. We believe that the UniLad Group brands complement our existing offering and we can promise our audience more of the stuff they love from all the brands in the new LADbible Group family.”
Mike Danson is the maddening Brit who, in 2007, sold Datamonitor to Informa for £502m only to buy it back eight years later for just £25m. Now, he’s busy building another billion dollar research and data business, GlobaData Plc. But, meanwhile, he has just splashed $31.5m on a 12,000 sq ft, six-storey home in Manhattan’s Upper Eastside, which was formerly owned by Michael Jackson. Nobody announced the purchase but, then, even Danson’s quoted company has been known to forget to tell investors about the odd £20m acquisition (Infinata in 2017). Lots of things are unusual about Danson’s 68%-owned, quoted company including the succession of acquisitions and disposals (at least six during the past two years) passing between his private and public companies. The largest ‘related party’ deal was this year’s acquisition of Research Views for £100m – priced at almost 45 x EBITDA and 4 x revenue. If you thought the Informa deals were doozies, Mike Danson negotiates even better with himself. Then, there’s the fact that GlobalData Plc pays Danson’s own company for its offices as well as for accounting, HR, IT, and facilities management. Apart from the odd loan between the private and public companies, all these “corporate services” are a £3m annual bill for GlobalData whose minority investors might just worry about a certain lack of independence. But this is the messy backstage of a company that is growing impressively. In 2017, revenue from its services across the retail, ICT and healthcare markets increased by 22% to £121.7m. Organic growth accounted for more than half of the increase. In the first six months of 2018, the company did even better, increasing EBITDA by 31% to £14.6m on revenues that were up 32%. Subscriptions have been growing fast and the company is targeting 25% profit margins. The leading brands include: Canadean, Kable, Verdict, Current Analysis, PharmSource, and MarketLine. GlobalData claims to offer 4,000 corporate customers “a single user-friendly interface, an end-to-end view of your entire industry value chain: from suppliers, manufacturers, channels to end-users (being consumers, patients, customers), all in one place and easily shared with colleagues.” Nobody knows better than Danson how to build “premium data and analytics” and, perhaps, nobody is better at charging “real” subscription prices. Even insiders who are quick to identify his workaday absence of “emotional empathy” admire his analytical skills and deal-making. He doesn’t give interviews and doesn’t much care what people say. But behind the harsh epithets is the man who quietly built Datamonitor in his north-west London apartment and financed it from thousands of pounds run up on multiple credit cards. Danson personally made almost £200m from the sale of Datamonitor, right at the top of the market. In the intervening years, he has donated some £10m to bursaries for under-privileged students in his old college at Oxford University and other educational causes in Africa, Asia and the UK. He has been a benevolent supporter too of needy UK magazines like Press Gazette and the politically-left New Statesman. And he likes his Premier League football (Manchester United and Chelsea). That’s the softer side of the man whose latest company is worth £650m but frustrates and excites investors in equal measure. GlobalData’s annual report discloses that revenues are nicely spread with 40% from each of the US and Europe, and the rest from the AsiaPacific. But it is difficult to find the usual investor information on the web site, and who can tell which of the multiple companies operating from his London headquarters belong to the public group and which to the private one? Our guess is that the indulgent confusion will continue for some time yet, and that more deals are in the pipeline. But any indications of new corporate transparency – and some media interviews – may become the signs that Mike Danson is ready to sell again. Let’s wait for 2019.
News. Johnston Press (JP), the heavily indebted UK news group behind the i, The Scotsman, The Yorkshire Post and around 200 other titles, has (finally) put itself up for sale. The group’s collapse perfectly illustrates the decline of the regional newspaper market in the past decade. In 2006, the company had 8,823 employees and a salaries bill of £206m; last year there were just 2,141 employees costing some £85m. Between those two dates, recruitment classifieds plunged from £246m to just £80m. But there were other problems. For 200 years, JP it was a small, family-owned printer publisher based in Falkirk, Scotland. Almost 50 years ago, Freddie Johnston, the founder’s great-great-great grandson started making ever more ambitious acquisitions. The company IPOd in 1988 and proceeded to load up with deals and debt, notably under former engineer Tim Bowdler who was CEO during 2001-9. The engaging Bowdler’s media career started as a steady move through the gears: a cautious start, solid 30%+ profit margins, a buying spree, £1m pay cheques – and, then, crash! The company has been in a spin ever since but has been struggling even more urgently with its finances since March 2017, when it first started negotiations to refinance a £220m bond due for repayment on June 1 next year. It recently kicked off a strategic review of its options. But newish CEO David King (ex Time Out and BBC Worldwide) has had to admit that the company would struggle, to say the least, to refinance that 2019 debt payment. Johnston Press is still profitable and actually reported an increase in operating profits of £7.4m at its most recent interim results. But it is highly indebted and also has a pension scheme deficit of £40m, leaving the market value of the company at just £3m (compared with £1bn a decade ago). The more curious losers include JP’s second largest (11%) shareholder, Malaysian communications billionaire Ananda Krishnan who invested his £120m profit from the 2008 sale of London’s Excel exhibition venue, on the fateful advice of a UK media executive. The stake quickly lost most of its value. Buyers of the newspaper group could include Reach Plc (the former Trinity Mirror which recently acquired the Express and Star daily news brands from Richard Desmond) and the Gannett-owned Newsquest – if they are not put off by the debt and the presumed need for substantial redundancy payments. But insiders are wondering whether Rothschild, which is handling the process, will succeed in flushing out philanthropic or not-for-profit owners for what are still some of the UK’s best-known newspapers. For all reasons, a single transaction will be the objective of the JP investors-lenders but there will be a much longer line of prospective buyers for individual brands like The Scotsman, Belfast News, Sheffield Star, and Yorkshire Post. The relatively buoyant national newspaper i (formerly owned by The Independent) is most likely to be sold separately anyway, perhaps to Reach or even to The Guardian or News Corp. It may well take a reluctant break-up decision to prompt a flurry of not-for-profit bids for individual regional brands. It’s going to be rough.
B2B information. Advance Publications, Inc. has acquired a majority stake in Newzoo. Transaction terms not disclosed but as part of the agreement, Advance will make a significant capital investment to accelerate Newzoo’s growth as the global leader in games and esports analytics. Amsterdam-based Newzoo is a market intelligence and analytics firm with a primary focus on games, esports, and mobile. Its core business provides direct access to both global and country-level data that informs strategic and daily decision making. Advance is the Newhouse family-owned media group, founded in 1922, whose global interests include Reddit, and Condé Nast brands such as Wired, Ars Technica, and GQ, and 1010data, a cloud-based analytical intelligence and consumer insights business. Advance recently embarked on a multi-billion dollar capital redeployment initiative to accelerate diversification from a traditional dependence on print newspapers and magazines. In August, it acquired another Amsterdam-based business, Stage Entertainment, a production company focusing on musical theater in Europe.
Events. the UK-based EHI Live has been acquired by CloserStill and will be integrated into the organiser’s healthcare portfolio as part of the Digital Healthcare Show, which itself is part of the Health+Care series which will run at ExCeL London on 26-27 June 2019. Transaction terms not disclosed. CloserStill is the 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 £55m and said to have industry-best EBITDA margins of almost 50% and prodigious annual growth rates. The company was created by tradeshow veteran Phil Soar, former 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 is doing plenty of bolt-on acquisitions. It’s looking ready for a really big deal – as buyer or seller.
B2B Information. Buyout funds Blackstone and Hellman & Friedman — alongside co-investors CPPIB from Canada and GIC from Singapore — are rumoured to be exploring the possibility of a bid for Nielsen, which has recently hired bankers in New York to explore strategic options. Neilsen has an enterprise value of around $17bn.
B2B Information. Dentsu Aegis Network has acquired B2B International, the UK-based specialist business-to-business (B2B) market research company. B2B International will become part of Gyro, the full-service global B2B agency it purchased in 2016. Financial details were not disclosed.
Social Intelligence. Brandwatch and Crimson Hexagon are merging to create a $100m-revenue business. Brandwatch, of Brighton in the UK, claims to be the world’s leading social intelligence company whose teams build software solutions for hundreds of businesses including Unilever, Whirlpool, British Airways, Walmart and Dell. The Boston, US-based Crimson Hexagon “helps global brands better understand their consumers”. Its AI-powered platform allows clients (including Anheuser-Busch, Adidqas and Twitter) to analyze audiences, track brand perception and campaign performance, and detect competitive and market trends. The merged business will be known as Brandwatch.
B2B information. Minneapolis-based DTN has agreed to acquire Weather Decision Technologies to enhance its weather technology platform. Terms of the transaction not disclosed. DTN claims to be “the independent, trusted source of actionable insights for 2m customers focused on feeding, fuelling and protecting the world.” DTN focuses on the agriculture, oil and gas, trading, and weather-sensitive industries.
News. Punters Paradise Pty Limited, a subsidiary of News Corp Australia, has agreed to acquire Racing Internet Services Pty Ltd (Racenet). Racenet provides horse racing news, form guides, tips, statistics and tools to punters. Transaction terms not disclosed.
B2B information. Skift Inc, the five-year-old global travel industry platform, has acquired Airline Weekly, of Florida, for a modest price that is believed to be principally geared to future profits and shares. Airline Weekly (AW) was founded in 2004 and publishes a subscription weekly ‘magazine’ emailed as a PDF. Curiously, it even looks like a print newspaper. But it’s a high-rated news and information source especially among US airlines, and is said to have some 7k subscribers paying $775 per year. Less than 10% of revenue comes from ads, and the staff exclusively comprises the three founders. AW is thought to be marginally profitable. Its tagline -“Shouldn’t a publication about an interesting industry be, well, interesting?” – sounds like something right out of the mouth of Skift founder Rafat Ali whose three-month negotiation with Airline Weekly’s founders was betrayed by tell-tale AW quotes on Skift. The opportunistic deal spotlights the rising success of Skift, now said to be profitable with revenues of some $8-12m (primarily from events, research reports, and sponsored content). The company has almost 60 employees, mostly in New York. It is 10 years since Ali sold his PaidContent media-tech web platform to The Guardian for some $12m. It had some 200k page views but they neatly included the daily newspaper’s senior executives who were momentarily joyous about their first acquisition outside the UK. Ali was pretty pleased too and managed to fill reporters’ notebooks with the rags-to-riches story that he had created his super-blog about the business of ‘new media’ in 2002 as a kind of job résume: “I was trying to get hired. I was trying to show employers the kind of journalism I could do. I never thought it would be a business” (even though he had private equity funding). But The Guardian deal, whose price would have more than doubled if only growth targets had been met, quickly went sour and ended, two years later, with PaidContent being swallowed up by GigaOM for next to nothing. Rafat Ali quit with regrets of being sweet-talked by the loss-making UK newspaper. In 2012, he bounced back with the launch of Skift, described at the time as “an online trade publication that writes about the travel business, and primarily for the travel business, with occasional stories that go viral with a much larger audience”. That’s only part of the story for a new kind of publisher in a B2B media world that has flipped from being dominated everywhere by large publishers with multi-sector portfolios to versatile global specialists who deep-dive into everything from high-value information to consulting, and research to events. Rafat Ali is a student of media, and Skift seems like nothing so much as a colourful cocktail of ingredients from four highly-personalised, community-building media successes by new-wave entrepreneurs in the US and UK: Monocle, The Information, The Business of Fashion, and The Wrap. But what happens next is the exciting bit. Ali’s painful lessons from his little skirmish with The Guardian and his polished story about “not wanting” to add to the $2.5m he had raised from venture capital in Skift’s early days, can’t really be taken at face value. He may continue to snap up pockets of expertise in travel and also hospitality, into which he has been expanding. And we bet he will be doing more of his stylish print magazines. But the question is who will reward Rafat Ali for creating one of the world’s sexiest B2B media brands? And when?
Exhibitions. ITE is buying the world-leading Mining Indaba conference and exhibition for £30.1m – half the price Euromoney paid for it in 2014. The 23-year-old event, which takes place annually in Cape Town, this year made EBITDA profit of £3.7m on sales of £7.2m. The sale represents another strategic shift for Euromoney which had acquired Indaba for $78m (£60m). It had seemed to fit with the company’s (former Metal Bulletin) metals and mining portfolio. So, does this cut-price divestment signal that yet more is to follow in CEO Andrew Rashbass’s strategic clear-up? The 8x EBITDA price for a well-established, high-margin exhibition and the fact that the Indaba sale is only partly being settled in upfront cash suggests Euromoney is, let’s say, an enthusiastic seller. ITE will make an initial payment of £20m, with the remaining £10.1m being paid in June 2019. But what looks like a very good deal for ITE did not quite make it a good week. In a reminder of the changes being wrought by the company, which once depended on the Russian market, ITE warned that the fall in the Russian rouble and also in the Brazilian and Turkish currencies would hurt 2019 results. But investors are expecting great things from the 27-year-old exhibition company’s transformation, including the £300m acquisition of the International Spring Fair and other retail shows from Ascential. With almost £80m of revenue in 2017, it is believed that these events could triple ITE’s revenue to at least £230m with profit margins of more than 25%. Revenues from Russia are forecast to fall to some 25% of the ITE total, compared with more than double that just a few years ago. The UK will now be bigger than Russia for ITE. If the company achieves its targeted £5m of cost savings on the seven acquired exhibitions, CEO Mark Shashoua (who once managed the International Spring Fair et al for Ascential) will have delivered real stability to a company once so sensitive to the volatility of Russia and other developing economies.For the most recent year (up to September 2018), ITE is expecting to report like-for-like profits up 10%. But that’s just the start in ITE’s race to be a diner not the dinner in the growing consolidation of global exhibitions.
Broadcast-streaming. The UK broadcaster ITV joins Liberty Global in withdrawing from the Endemol Shine sale process, leaving Banijay, the French television group, and Endeavor, the Hollywood talent agency turned media company, among the final bidders for the owner of series such as Big Brother and The Fall which has a rumoured price tag of up to £3bn.
B2C digital. 91mobiles, India’s leading gadget research website, has acquired a majority stake in Pricebaba, a consumer electronics price comparison site. Pricebaba claims to serve around 5 million monthly users. With this acquisition, the Gurugram-based 91mobiles will now operate three websites in the gadgets vertical including 91mobiles.com, tech lifestyle portal KillerFeatures.com and Pricebaba.com, with a claimed combined total reach of 30m visits per month. Transaction terms not disclosed.
B2B information. Cox Automotive Inc, of Florida, whose brands include Autotrader, Clutch Technologies, Dealertrack, Kelley Blue Book, Manheim, NextGear Capital, VinSolutions, vAuto and Xtime, have acquired the Texas-based F&I Express. F&I Express provides digital information solutions to the automotive after-market. Terms of transaction not disclosed.
Magazines. DC Thomson, the Scotland-based, family-owned media group, has acquired the UK specialist magazine publisher Aceville, which has more than 30 brands across crafts, gardening, health and food, together with a growing B2B portfolio. The estimated £20m deal shines a light on a little-known publisher which has piled up impressive magazine sales and digital audiences over the past 15 years from its Colchester base, 60 miles from London. The company which employs 190 people (most of whom began their careers with the company) is believed to have revenues of almost £25m and has been privately owned, but managed since its launch by the quietly impressive managing director Matt Tudor. The 113-year-old, much larger DC Thomson likes Aceville’s under-the-radar performance because its own success has so often been under-estimated by the London media market 500 miles from its headquarters in Dundee. The city port’s economy was formerly branded as the three Js: journalism, jute and jam. Now, it may become even better known as the location of a spectacular offshoot of London’s celebrated Victoria & Albert design museum. But Dundee’s largest employer DC Thomson has long been one of the most profitable print-centric UK companies – and its financials give little clue to the media disruption everywhere else. Last year, it made £38m of pre-tax profit on £127m of revenue (a stunning 30% margin) from a portfolio spanning historic Scottish newspapers (in Dundee and Aberdeen), quaint old-fashioned women’s magazines (The People’s Friend and My Weekly), online genealogy (Findmypast), Puzzler publications, books (27% of revenues), and the pioneering free weeklies Stylist and Shortlist which were acquired for £14m in 2016. Oh and there’s the legendary, 80-year-old British children’s comic The Beano which has now spawned top-rated TV cartoons. Some 30% of revenues are from outside the UK (half from the US), and 13% of all revenue is digital. One former insider says: “They have a rather old-fashioned air. People imagine they are provincial and narrow minded but the truth could not be more different. Look at the board of family members: Christopher Thomson is one of the brightest intellects and smartest investors you could ever meet. Richard Hall is an ex lawyer, charming and urbane but with a mind like a whip. David Thomson is young and ambitious, a future chairman in waiting. And current chairman Andrew Thomson is the elder statesman; calm, patient and a respected presence at the helm.” Along the way, DC Thomson has been a shrewd and steady investor in almost every branch of UK media, and has been much more techie than you would ever guess. They are patient, measured and very consistent. Some investors are notorious for changing their minds about the health of a business they are investing in, according to last person they spoke to or something they have just read. But DC Thomson is calm, optimistic and really does seem to view short-term difficulties as long term opportunities. It has a reputation among a growing club of admirers (who have long since forgotten about the company’s once patchy reputation as an anti-union employer) for taking the longest view you can imagine. The Thomson family don’t panic, they follow their instincts and they back good people, even through bad times. But they don’t shout a lot about it. The Aceville acquisition now makes it the UK’s fifth largest magazine publisher (with some 70 brands) at time when most companies are less keen to make any claims about print. But, then, DC Thomson and Aceville have both done wonderfully well – at opposite ends of the UK and the media scale – by not worrying too much about the rest of the world.
Broadcast/Outdoor. Global Media & Entertainment, the UK’s largest commercial radio operator whose networks include Capital, LBC, Heart and Classic FM, has acquired the out-of-home advertising companies Primesight and Outdoor Plus for £200m — its largest ever deals. The two companies have aggregate revenues of some £90m. The 11-year-old Irish-owned Global has expanded into advertising and music festivals in recent years amid radio industry concerns about declining young audiences. But overall audiences and profit growth (for Global as well as its close UK competitor Bauer) seem to have avoided any kind of digital disruption – so far. Even music streamers like Spotify, Apple and Amazon seem not to have dented the popularity of radio in the UK. But the impressively growing £300m-revenue and 26% EBITDA-margin Global is not waiting for the tsunami that just might hit radio at some point; its investment in the increasingly digital world of out-of-home advertising (OOH) seems a smart move. A 2017 report by PWC forecast that digital out-of-home (DOOH) would become more widespread everywhere in ways that would improve measurability and targeting. DOOH allows for more dynamic ads, some resembling short broadcasts more than static posters. Many high-traffic outdoor sites feature a spattering of news, weather and celebrity content to reinforce the comparison with broadcast media. As DOOH is still relatively new, digital formats carry more prestige and tend to be targeted by top-tier advertisers. Global DOOH revenue has increased from $6.9bn to US$11.7bn in the past four years and the digital proportion of all OOH advertising has increased from 23% to 32%. The UK is one of the most digitised markets in Western Europe. Global’s two-deal swoop to become the country’s fourth largest OOH firm (behind JCDecaux (the 35% leader), Exterion and Clear Channel) is sure to spark some advertising innovation in shopping malls and transport hubs that may combine big-screen digital displays with radio and messages on the smartphones that increasingly also account for young radio listening. Global hopes to make Clear Channel, for one, wish that it still owned America’s largest commercial radio network. Convergence looms.
B2B information. Swiss private equity company TBG AG is buying MeteoGroup, the UK-based weather forecasting group which supplies data to, among others, the BBC and British Airways. This follows a troubled period for Meteo under the ownership of General Atlantic (GA), which acquired it in 2014 from the UK news provider Press Association (PA). Since the £128m purchase (a welcome windfall for PA’s newspaper group owners), the £50m-revenue MeteoGroup has expanded its global services for the shipping, offshore, transport, media, energy, and insurance industries. It now operates in 18 countries and claims to be the market leader in Europe. Its 2018 revenues are said to be 25% ahead of last year. But, until now, the expansive strategy has come at the cost of operating losses and static, at best, revenues for the four years of GA ownership – after previous years of solid profitability. Deal terms for the disposal to TBG (which is subject to regulatory approval) were not disclosed, but it will be loss-making for GA. Zurich-based TBG also owns DTN, an independent provider of decision-support solutions to the global agriculture, oil and gas and other weather-sensitive industries.
Broadcast-streaming. The Liberty Media-owned US satellite radio giant SiriusXM has offered to acquire Pandora in a share deal. It plans to keep Pandora operating as an independent service. But the deal will create a US audio monolith with more than 100m monthly listeners – and a beach-head against Apple, Spotify and Amazon especially in cars where US streaming audiences are concentrated. Liberty is also rumoured to be trying to acquire iHeart, America’s largest radio network (formerly Clear Channel).
Broadcast-streaming. Following Comcast winning the Sky TV auction at the weekend with their full-out £30bn bid, 21st Century Fox and Disney have confirmed they are selling Fox’s 39% stake in Sky (part of Disney’s Fox acquisition) to Comcast. So Comcast will own Sky outright and become the world’s largest payTV broadcaster. Next big move: Disney’s 2019 launch of its trumpeted Netflix rival. And who will buy or merge with Netflix? Who will buy the UK’s ITV production-strong network?
News. Softbank, KKR and Primavera Capital are variously in talks to invest a total of $1.5bn in Beijing Bytedance Technology, the six-year-old owner of mobile news app Toutiao and short-video app Douyin. Its TikTok (with 500m global users) is regarded as the new rival of Chinese internet giants Alibaba and Tencent. Bytedance makes most of its money from advertising placed in the apps. These latest planned investments could value the company at $75bn.‘Toutiao’ means headline. The site does not have any original writers and uses AI technology to organize daily news and give recommendations. The featured articles and videos are selected according to user locations, click and browser history, and even phone models. Toutiao has over 20,000 traditional media partners and 800,000 new media content creators. In 2017, the platform claimed 120m daily active users. With over 4,000 partnering news portals, its valuation was then set at around $20bn. It is believed that Bytedance, whose current investors include KKR, General Atlantic and Sequoia, could IPO in 2019. Phew.
Magazines. Eight months after its acquisition of Time Inc., Meredith Corp is selling Time Magazine to Salesforce founder Marc Benioff and his wife Lynne – for $190m. The Benioffs are buying it personally (not through Salesforce) and say they won’t play a role in daily operations or editorial decisions. The sale process for Time and the other three magazines (Fortune, Sports, Illustrated and Money) still being negotiated, has been much more protracted than Meredith had forecast but the price of this first deal may be almost double what had been expected. The legendary news magazine reportedly had $173m revenue and $33m of EBITDA profit in 2017. This profit figure is believed to have been ‘adjusted’ to include large-scale reduction in costs including some traditionally high central overheads, before and since the Meredith acquisition. It’s been a timely turn-round. Eight months ago, brokers forecast that Time might be sold for $100m and that Fortune and Sports Illustrated might together reach a further $300m. This sale (like the whole Time Inc acquisition) is, therefore, likely to burnish Meredith’s reputation for smart deals. It will be interesting to see whether the Time magazine price proves to be the best of the pack – depending, presumably, on whether Meredith can snag another digital billionaire or two. The other former Time Inc magazines are expected to be sold by the end of 2018. The billion dollar question is whether – after Jeff Bezos (Washington Post), Alibaba’s Jack Ma (South China Morning Post), Laurene Powell Jobs (The Atlantic), and Marc Benioff – the likes of Mark Zuckerberg, Bill Gates, Steve Ballmer or Larry Page will be seeking their legacies in legacy media. Motivational speaker Tony Robbins and Quicken Loans founder Dan Gilbert are said to be interested in buying Fortune, Money and/ or Sports Illustrated. (And, waiting in the wings for gilded buyers and/or investors is the Wasserstein-owned New York magazine.) Whatever Marc Benioff does with Time magazine, this latest tech billionaire to invest (philanthropically?) in traditional media will not be the last. There will, surely, be many more “mediaires”. Nothing drives the sale of toys like fashion.
Broadcast-streaming. TV production group Endemol Shine is on the block. Rumoured bidders in what could be a $2.5bn auction include: the UK network ITV, Liberty-owned All3Media, Banjay (Vivendi) and – the hot tip – the Hollywood talent group Endeavour. Endemol Shine’s hit programmes include The Fall, MasterChef, and Peaky Blinders. The current owners, 21st Century Fox and private equity firm Apollo, are selling four years after forming it in a merger of Endemol (best known for Big Brother) and Shine, the producer of MasterChef founded by Elisabeth Murdoch. Endeavor’s bid is backed by Silver Lake and Softbank. Formerly known as William Morris Endeavor and representing Hollywood stars such as Charlize Theron and Ben Affleck, Endeavor has expanded rapidly in recent years. Co-chief executives Patrick Whitesell and Ari Emanuel (the “super agent” who inspired the lead character in TV show Entourage) have acquired the $2.2bn sports producer and agent IMG and the $4bn Ultimate Fighting Championship. Insiders suggest that the auction is nearing its climax and that the final bidders are likely to be ITV and Endeavour.
Broadcast-streaming. Haim Saban is buying camera equipment specialist Panavision and Sim Video International in a $622m cash and stock deal. The transaction is aimed at creating a comprehensive production and post-production entity serving the hot SVOD market. It will be named Panavision Holdings Inc. and is expected to continue to trade on Nasdaq. Saban will pay Panavision shareholders $368m in cash and 8.1m shares of Saban stock with another 6m shares vesting over time. Sim’s investors will receive $110m in cash and 3.1m shares. The $622m transaction reflects a multiple of approximately 5.9x fiscal year 2018 EBITDA. Haim Saban is the founder of Saban Entertainment, producer and distributor of children’s television programs in the US such as Power Rangers. He previously headed the German TV network ProSiebenSat1 and Univision Communications.
Australia’s newly-relaxed media ownership laws are likely to permit the country’s two largest magazine publishers to merge, even though Bauer Media Australia (formerly ACP Magazines) and Pacific Magazines (owned by Kerry Stokes’s TV-digital-print Seven West group) have a combined market share of more than 80%. That’s how far magazines have slipped down the media ladder even in a country which once had the largest pro rata circulations among English-speaking countries. Nobody in Australia, it seems, is now worried about a magazines monopoly. Cue Bauer and Pacific which are known to have held talks about a potential joint venture for ‘back end’ services including merchandising, subscriptions and procurement – broadly on the lines of that concluded a few years ago in the US between Hearst and Conde Nast. But Nine Entertainment Company’s recent audacious swoop on Fairfax Media – to create the country’s largest multi-media group (by far) – has prompted suggestions that the two magazine groups could now combine, presumably in a low-cash acquisition by Bauer. The CEO of Bauer in Australia and New Zealand (which publishes many of the country’s best-known magazines and digital services including Australian Women’s Weekly, Gourmet Traveller, Woman’s Day, and Cosmopolitan) is Paul Dykzeul. Like his predecessor, he was formerly also at Pacific Magazines (publisher of Marie Claire, Better Homes & Gardens, InStyle, and New Idea) so is in a perfect place to plan a ‘merger’. The Bauer Media Group, based in Hamburg, owns 600 magazine-centric brands and 50 radio and TV stations across 17 countries. After decades of being primarily a magazine publisher, the company has been slimming down recently and, instead, investing in radio especially in the UK and Europe, where it is now the largest operator. Bauer has broadcasting ambitions in Australia and Fairfax’s 54% share of the Macquarie radio group may be up for sale in 2019, after the Nine deal completes. But a big new Bauer investment would have to wait for some earnings stability in its Sydney-based group whose revenues are way off the forecasts when it bought the business in 2013. A deal with Pacific Magazines might just sort it.
Events. The A$4.2bn ‘merger’ of Australia’s Nine Entertainment and Fairfax Media to form the country’s largest media group – embracing everything from network TV, to streaming, digital classifieds, radio and news brands – is almost certain to get approval from the competition authorities in November. The recent change of Prime Minister from Malcolm Turnbull (who had explicitly supported the deal) to his same-party rival Scott Morrison has made the dealmakers nervous. But nobody expects Australia’s first mega-media deal to be blocked, not least because the industry’s other large players, Rupert Murdoch’s News Corp and Kerry Stokes’ Seven West, have deals of their own to push through the newly relaxed media ownership laws. But many companies are picking through the detail to find Fairfax divisions that Nine may not want. The first of these may well be Fairfax Events which organises Sydney’s brilliant City2Surf race, the Night Noodle Markets, and the country’s open-air movies. First to show an interest in the $70m-revenue division – which is said to make EBITDA profit of some A$10m – was the three-year-old, Denver-based Motiv Sports. The call was unsolicited but unsurprising to Fairfax since it came courtesy of Sarah Pohlman who used to manage the business before joining Motiv, which organises Blackmore’s Sydney Running Festival. Motiv Sports self-describes as “an active lifestyle and entertainment company focused on delivering authentic and immersive live and digital experiences”. It currently operates some 40 running and multi-sport events in the US, Canada, Australia and the UK. The interesting thing is that such headlining events, which are growing everywhere on the back of encouragement by tourist, media and health -conscious governments, mostly operate well beyond the orbit of the exhibitions companies which have all the infrastructure, skills and connections needed for what might be neat diversification. Given the local estimate that the Fairfax Events business is being valued at only 6x EBITA (compared with at least double that for exhibitions), we know some people who should get with the program.
B2B information. The Wrap, the California-based movie and media super-blog, is acquiring a video subscription service which will get struggling digital media bosses everywhere thinking about the way to go. The Wrap News Inc announced an un-priced, all-share deal with the six-year-old Videolnk (yes, that’s the right spelling), the $30/month subscription source for business news about the digital video industry. The two will eventually be combined into a new subscription site called Wrap Pro. The Wrap was founded nine years ago by Sharon Waxman, the author and esteemed foreign correspondent (for the New York Times and Washington Post). It self-describes as “a multiplatform news and information network covering the entertainment and media industries, from an anchor of high level, original content, that leads to the engagement of a vibrant community of users – entertainment professionals and enthusiasts – around the globe.” With more than 19 regular contributors and with guest commentary from industry heavyweight “Hollybloggers”, The Wrap is great reading. The logic for adding a subscription business to the free site, which apparently attracts 10m visitors a month, is based on the familiar fear that the digital advertising business is going bad unless you are Facebook, Google and Amazon. Waxman says she’ll keep her main site free but will use Wrap Pro for “premium” content plus she is planning subscriber access to her growing slate (currently 75) of events including screenings, influencer events and conferences. The site earns revenue from advertising, sponsored content as well as the events. Most insiders believe that the slew of exclusive content would have long ago enabled it to convert some thousands of its readers into subscribers, even without Videolnk. “It’s our job to make what we’re offering really worthwhile, really valuable, and really produce a benefit to our members,” says Waxman who last year hit the headlines by disclosing that, in 2004, the New York Times spiked her expose of Harvey Weinstein’s history of sexual harassment. The Wrap strategy may soon come to resemble that of former Wall Street Journal tech reporter Jessica Lessin whose five-year-old The Information is now believed to have some 20k subscribers paying $500 a year. It also runs subscriber events and has many of the personal touches perfected by Sharon Waxman. There are not too many other similarities between the scoop-laden The Wrap and the two-stories-a-day jewels of The Information. But we bet that Waxman will also be able to show that – for all the doom and gloom of legacy news brands – readers will pay for insightful, well-targeted content they can’t find nowhere else. Just make sure it’s exclusive content, and do have the nerve to charge what it’s worth to readers who want it. That’s all.
Events. New York City-based private equity firm MidOcean Partners is acquiring, from Shamrock Capital, Questex, the Massachusetts-based B2B exhibition organiser in the travel, hospitality, pharma, healthcare, beauty and tech markets. Questex has over 125 tradeshows including the International Beauty Shows. Terms of the transaction were not disclosed, although the price is rumoured to be around $180m which is 1.8 x revenue. Questex employs over 350 people in offices throughout the US, Europe and AsiaPacific. The MidOcean deal features some interesting exhibitions-steeped personalities. The acquisition sees a change at the top where Questex’s founding CEO Kerry Gumas (ex of Advanstar, Reed Exhibitions and IDG) is handing over the reins to Paul Miller (long time at UBM) who has been with Informa since its $1.6bn acquisiti0n of US-based exhibitions and B2B group Penton. The man who helped to clinch that whopping price from the voracious Informa is David Kieselstein, former Penton CEO (and executive from D&B, Kantar TNS and Time Inc.) negotiated the deal for MidOcean and will now become chair of Questex. In these years of exhibitions consolidation, where will Kerry Gumas end up after the expiry of his Questex advisory contract?
Events. US exhibition organiser Emerald Expositions is acquiring Total Tech Summit from EH Media, as well as a group of complementary tech events, for US$28m. The Summit is a three-day event which this year takes place November 7-9 in Pittsburgh. Emerald claims to be the largest operator of business-to-business trade shows in the United States by net square feet. It currently operates more than 55 trade shows. In 2017, the company claims its events “connected over 500k global attendees and exhibitors and occupied over 6.9m net square feet of exhibition space”.
Events. Informa Plc has acquired a 20-year licence to operate the influential CMA Shipping Conference & Exposition on behalf of the Connecticut Maritime Association. The UK-based exhibitions market leader already has a substantial maritime information and events portfolio including Lloyd’s List, Lloyd’s Maritime Academy, and also the Seatrade cruise events acquired as part of this year’s ‘merger’ with UBM. CMA Shipping attracts over 2,000 maritime industry leaders, owners and ship managers each year.
Broadcast-streaming. The Comcast and 21st Century Fox (Disney) competition to acquire the European Sky TV (for a value last set at £26bn) will be decided by sealed bids in an auction administered by the UK Takeover Panel. September 22 is the last day either can change their bids. Hold your breath.
B2C digital. Cash hungry Opendoor, a four year-old, San Francisco-based company, has acquired Open Listings for an undisclosed sum. Opendoor closed on $325m in new funding in June in a round that brought its total equity funding to $645m to date — and its valuation to more than $2bn. The company has also raised $1.75bn in debt, and two sources tell us more funding from SoftBank is imminent. Open Listings is a four-year-old, LA-based startup that has aimed to make it easier and cheaper for buyers to purchase homes by automating much of what an agent would do, thus reducing the fee an agent would traditionally take. One of its stated goals has been to make home ownership more affordable for everyone by refunding 50% of their commission to the buyer at close.
Magazines. The German-owned Immediate Media, of the UK, has acquired the BBC Good Food brand including the magazine, digital and live events businesses, with which it has had an agency relationship since much of the company’s portfolio was originally spun-out of the BBC in 2011. Immediate claims the deal makes it the “largest food media publisher in the UK”, which sits well with its less trumpeted accolade of being the UK’s most profitable magazine publisher. BBC Good Food is the UK’s largest food website with 22m global monthly visitors, and the best-selling food magazine, with 1.3m monthly readers and an average print circulation of 160k. BBC Good Food brings with it strong but under-profitable events including the: BBC Good Food Show and regular roadshows with the UK’s top chefs, tastings, shopping and entertainment. These events are claimed to attract 300,000 visitors who reportedly spend £27m at the shows. The out-sourced organiser River Street Events (whose owner formerly managed the events at the BBC’s erstwhile events partner Haymarket Media) is bracing herself for a re-negotiation with (or job offer from) the new owner. BBC Good Food also has a popular Amazon Alexa recipe skill which will enhance Immediate’s opportunities in burgeoning audio media. It is believed that the BBC Good Food portfolio has total revenue of almost £25m – doubled in the past five years – with digital revenue now having overtaken print. Although financial terms have not been disclosed, it is believed the acquisition price was some £30m. It is believed that Immediate plans now to extend the brand’s live events and there is some talk that it will seek to buy the independently-owned and impressive (but only marginally profitable) Great British Chefs. This latest UK deal highlights the success of Hubert Burda Media, which acquired Immediate Media from Exponent private equity for £260m in 2017. In its last financial report, it said that the Immediate acquisition had almost doubled the Burda’s international business which accounted for €455m (18% of all Burda revenue) and made the UK its largest market outside Germany. Immediate publishes the broadcast listings weekly Radio Times, Cycling Plus, MountainBike UK, Triathlon, Cross Stitcher Gold, Olive, Lonely Planet Traveller, and BBC titles such as Top Gear, Gardeners’ World, and CBeebies. It also has a growing slate of live events. Immediate’s success in achieving best-in-class profit growth over the past five years has – whisper it softly – been largely achieved through steep cover price increases on the extraordinarily resilient Radio Times. But the company has also generally achieved above-average magazine copy sales and invested smartly in digital e-commerce platforms in the wedding, jewellery, and craft sectors, and in events. The under-stated CEO Tom Bureau has been a starring act in a pretty cloudy world. It’s not the kind of performance we have come to expect from the beleagured magazine market. But, then, that goes also for the German parent company. In 110 years, the family-owned Burda has grown into one of Europe’s largest and steadiest publishing groups. Its real rise to prominence began in 1949 with the launch of Burda Moden, now called Burda Style, a German magazine containing sewing patterns for housewives in post-War Germany. Burda now has one of the world’s largest databases of digital sewing patterns. Across more than 20 countries, the €2.7bn-revenue company publishes more than 300 magazines, including Focus, the German news weekly, celebrity magazine Bunte, and local editions of Elle, InStyle and Playboy. Hubert Burda ran the company himself for 30 years until 2010, when he handed over day-to-day control to former McKinsey consultant Paul-Bernhard Kallen. His company is, more than ever, the magazine publisher that is admired (and envied) by magazine people everywhere. Dead cool.
2013 Context: Is Immediate the digital model for magazines?
B2B information. UK-based information and events group Ascential has announced the acquisition of Brand View, a provider of price and promotion analytics to retailers and manufacturers, for up to £38m. The price includes conditional deferred consideration of up to £8.2m. Unaudited revenue for the year to June 2018 was £13m, and the transaction is expected to be immediately earnings accretive with Brand View expected to generate EBITDA profit margins of 20%. This relatively small deal continues Ascential’s track record of paying high prices: even if the 10-year-old Brand View was already making the targeted 20% margins, this acquisition multiple would be 15 x. In fact, the multiple of actual profit is believed to be 25x. But few B2B companies are as good at wringing the profits out as the £1.7bn Ascential. The company’s tech-savvy CEO Duncan Painter has been making very selective acquisitions in the UK and US and has already disclosed that Brand View will be integrated with Ascential’s OCR, Clavis and Planet Retail operations which will ensure some scale economies on a global basis. But this kind of price emphasises the importance of the listed company continuing to get the kind of organic growth that it has been able extract, for example, from its globalising Money 20/20 events. It’s flying high.
2017 context: Ascential, the new force in B2B media
Events. The UK listed exhibitions organiser ITE Group is disposing of no fewer than 56 of its smaller events in Russia, to Shtab-Expo LLC, a company owned by ITE’s former Russia chief. These events, which are said to comprise “a significant proportion” of ITE’s “non-core” events in Russia, last year generated profits of £1.3 on revenues of £12m. This ensures that the conditional disposal price of £8-13m (effectively as low as 5x earnings) will dilute the company’s profits, more so because payment is actually spread across eight years. The deferred payments (and the fact that the deal does not include all of ITE’s troublesome non-core Russian events) betray the enthusiasm to get rid. But the deal is also a sign that the profits of these small regional exhibitions are still in decline some years after they were first rocked by the perfect storm of sanctions on Russia, the conflict in Ukraine, and uncertainty in Turkey. This long tail of events has long been a burden for a company which has 16 major mostly Moscow-based events which will be retained. But ITE had been wary of the impact that a disposal would have on its trademark Russian events, including MosBuild, WorldFood Moscow, YugAgro and MITT. These events will now be operated by the newly-formed ITE Expo International LLC. The disposals follow those of Metaltech Malaysia and the closure of more than 30 unprofitable or marginal exhibitions. But nothing has so defined the two-year-old get-fit regime of CEO Mark Shashoua as this year’s £300m acquisition of seven UK exhibitions (including the legendary International Spring Fair) from his former employer Ascential Plc. That “insider” connection has encouraged some ITE investors who were momentarily spooked by the mere idea of buying a seemingly mature group of exhibitions from Ascential, an events company that has proved so adept at cutting costs and squeezing profit margins. With almost £80m of revenue in 2017, it is now believed that these events could triple ITE’s revenue to at least £230m with profit margins of more than 25%. Revenues from Russia are forecast to fall to some 25% of the ITE total, compared with more than double that just a few years ago. The UK will be bigger than Russia. If the company does achieve its targeted £5m of cost savings on the acquired exhibitions (and as long as any kind of Brexit-forced slowdown does not seriously erode the earnings of the UK retail-oriented shows), Shashoua will have delivered a whole lot more stability to a company once so sensitive to the volatility of Russia and other developing economies. If he soon manages to get some cash in return for the other non-core Russian shows, investors will be cheering even more. But, if there is another wobble in ITE earnings growth, there will be no shortage of exhibitions companies waiting to pounce on the 27-year-old £620m company. New global leader Informa and Blackstone-owned Clarion are watching. The smart money, though, is on ITE delivering – and then going on a spending spree of its own in 2019. After all, like-for-like revenue is more than 10% up so far this year. We’re backing you, Mark.
Context: Why Reed Exhibitions may be sold
Magazines. Future Publishing Australia, a division of the fast-growing Future Plc, of the UK, has bought the magazine-centric brands PC PowerPlay, Hyper and PC & Tech Authority from NextMedia for what is believed to be a price of less than A$500k. The 12-year-old NextMedia (which is managed by its founders, former ACP Magazines executives David Gardiner and Bruce Duncan) is now a Sydney-based subsidiary of the 30-year-old, privately-owned Forum Media Group (FMG), of Germany. FMG also has specialist and business media in Germany, North America and Asia. It has revenues of some €100m, and last year acquired 80% of the B2B media and events company Lighthouse in Singapore and Hong. It is a reasonable bet that Forum will become increasingly focused on B2B and will eventually sell NextMedia itself to the voracious Future, which has a range of complementary UK and US magazines. Just wait. Context: Future accelerates
Newspapers. Former US hedge fund manager Will Wyatt’s new Donerail Group is looking to acquire Tronc (the former Chicago Tribune Group). Donerail’s plan, after purchasing Tronc’s 10 daily newspapers, is believed to be to sell them off to individual buyers, some of whom are already believed to be lined up. Wyatt’s bid for Tronc is rumoured to be in the range of $640-700m. It is widely assumed that Rupert Murdoch’s News Corp has provisionally agreed to acquire the New York Daily News. Consolidation of some kind with his New York Post could produce some elusive profits.
Magazines. Peter Brant has bought back Interview magazine, after putting it into liquidation just over three months ago. A New York bankruptcy court approved Brant’s $1.5m offer. As he is the sole secured creditor, he is effectively buying the assets from himself – and essentially getting the magazine (launched almost 50 years ago by Andy Warhol) back for free. This move has enabled Brant to wipe out $3.3m in debts. Brant’s daughter Kelly Brant, who had been Interview’s president and responsible for its operations for the last several years, is believed to be planning to relaunch the title under most of the same leadership and a new holding company, Crystal Ball Media. The Business of Fashion says: “Over nearly 30 years as Interview’s owner, Peter Brant developed a reputation for not paying the bills. The independent magazine, known for pioneering the celebrity-on-celebrity interview format and documenting New York’s high and low culture, struggled financially in recent years. Media consumption shifted online and print advertising revenue declined. But Interview’s May 2018 bankruptcy filings reveal just how bad things had become. The magazine owed over $11m, had $17,000 in the bank and was valued at a mere $25,000. Former editorial director Fabien Baron alone was owed about half a million dollars in unpaid wages and expenses. Brant claimed to have loaned the business over $8m, guaranteed by Interview and its parent companies, since 2016. And both he and the magazine were facing multiple lawsuits alleging unpaid wages and wrongful terminations.” Oh well.
Music. Warner Music Group has now cashed in its entire 1.9% stake in Spotify for $504m. An estimated $126m of the consideration is set to be passed on to artists by way of a payment on account.
B2B information. Nielsen Holdings plc has acquired SuperData Research, a leading provider of market intelligence on digital games, gaming video content and virtual/augmented reality across mobile, PC online, console and other digital platforms. The company analyzes the spending of over 160m paying digital gamers, worldwide. Financial terms not disclosed.
Marketing. Bertelsmann hopes to complete a deal to sell its call-centre business this autumn, CEO Thomas Rabe said, as he overhauls the German publishing group in the face of disruption from big US internet platforms. Rabe put the €1bn-revenue Arvato CRM on the block in January and, announcing improved half-year revenues on Thursday, said he expected to finalise a deal with an outright buyer for the business in October. But Bertelsmann plans to retain the unit’s French operations.
B2B information. StormGeo, a world-leading provider of weather intelligence and decision support services is acquiring Nautisk, a leading global supplier of maritime charts and publications to the merchant marine from Norwegian media company NHST Media Group. Transaction terms not disclosed. The 20-year-old Norway-based StormGeo AS is one of the largest privately held weather service providers worldwide. It provides meteorological services, particularly to the energy, shipping and media industries.
Events. GS Media & Events, of Illinois, which owns and operates more than 25 recreation-focused consumer shows throughout the US, announced it has acquired the following eight consumer shows from RJ Promotions Inc: Des Moines Boat & Sport Show; Des Moines RV & Outdoor Show, Topeka Boat & Outdoor Show, Topeka RV & Sport Show, Overland Park & Outdoor Show, Colorado Springs RV & Outdoor Show, Colorado Spring RV & Travel Expo, and El Paso RV Show. Financial terms not disclosed. GS is a division of the private equity-owned Good Sam Enterprises and operates 23 recreation events in North America. It claims to be the premier publishing, online, and face-to-face marketing company serving the outdoors enthusiast.
Visual Communications. Mark Getty is taking back full control of the Seattle-based Getty Images Inc from private equity group Carlyle. They will acquire all of Carlyle’s equity in Getty Images for cash plus units that are said to provide the vendor with an ongoing financial interest in the company. Financial terms were not disclosed but it is rumoured that the deal values Getty Images at slightly below $3bn, including debt, which is less than the $3.3bn valuation Carlyle placed on the company when it acquired a majority stake six years ago. The reduced valuation reflects the challenges Getty has faced in competing in an increasingly digital media landscape. Founded in 1995 by Mark Getty and Jonathan Klein, Getty has had to adapt to a media shift from print to online, where prices for images are lower. The company’s CEO is Dawn Airey, a former UK TV executive who was CEO of Channel Five.
B2B information. The 12-year-old California-based AppFolio Inc, a US provider of cloud-based business software solutions for some 22,000 customers in the real estate and legal markets, has acquired the assets of WegoWise, of Boston, a provider of software for 450,000 property managers and owners of some 700,000 units, most of which are multi-family. AppFolio is listed on NASDAQ.
Magazines. Anthem Publishing, of Bath, UK, is in advanced negotiations to sell its music-making magazines to Singapore-based BandLab Technologies. The deal involves: MusicTech, MusicTech Focus, The Guitar Magazine, Guitar Classics and associated digital operations. Transaction terms were not disclosed. Anthem, which last month acquired Women’s Running magazine, was founded 15 years ago by ex Future Plc publishers Jon Bickley and Simon Lewis. It operates in the music, food and mindfulness sectors and has twice been honoured as UK Independent Publishing Company of the Year. BandLab operates a digital service used by millions of music makers and fans around the world to make, share and collaborate in music. It was founded by Meng Kuok, the son of a Singapore agribusiness entrepreneur who co-owns the world’s largest palm oil producer. In addition to online music sharing and video streaming, Meng Kuok owns a Singapore-based guitar retailer and a music merchandise company in San Francisco. The move into music-making magazines follows his 2016 acquisition of 49% of Rolling Stone magazine for a reported $40m. The deal gave BandLab direct responsibility for the magazine’s currently 12 licensed editions worldwide. But Kuok’s bid to acquire overall control of the magazine was frustrated by the sale of the remaining 51% to Penske Media, of the US, which reportedly includes some degree of continuing editorial control by the founding Wenner family. In Penske’s Variety magazine, Kuok professed to being happy to “share” Rolling Stone and about the brand’s growth prospects generally: “It’s not just a media brand. It’s much more than that. It references and reflects, and also influences and sets the tone for pop culture. That gives it tremendous opportunities. It’s not a one-dimensional brand. It also has a chance to be a global brand.” BandLab is thought likely to acquire other magazines and digital media in Europe, Asia and the US.
B2B information. The California-based Owler, which claims to be “the world’s largest community-based competitive insights platform and private company database” and which had already raised $19.3m, has secured (as yet undisclosed) further funding from Morningstar boss Joe Mansueto, and existing investors, Norwest Venture and Trinity Ventures. Owler, which was launched in 2011 as InfoArmy, began as a crowd-sourcing model where two-person home-working research teams would compile a report on each company for subscribers paying $99 a year. Two years later, it relaunched as Owler, with a completely different business model. It now offers a free mobile and online platform on company information for “members” who, having chosen to follow a set of companies, receive a personalised newsfeed and daily email. The Owler app covers trigger corporate events (i.e. funding events, leadership changes), company news and a community-driven Competitive Relationship Graph. It seeks to help business professionals uncover competitive stuff and discover new potential new rivals. The Owler “community” is said to comprise more than 1.5m members who both receive and share information on companies. Its leading competitors are reportedly InsideView (started 2005) and DataFox (2013), both of which have also been able to attract successive funding. But Owler seems more friendly and collaborative than these out-and-out subscription services. Owler’s ability to raise a total of, presumably, more than $20m in the past seven years, confirms the confidence that some smart investors have in a company which is said only to have revenue of some $3m. But its strategy is to engage free ‘subscribers’ with plenty of useful snippets and day-to-day information on the companies in which they are interested, in the hope of getting them to buy the high-value reports when the need arises. The company seems to be a natural extension of the highly-successful 20-year-old GLG (formerly Gerson Lehrman Group, which employs 1,700 people worldwide). GLG self-describes as “a learning membership connecting businesspeople trying to solve problems to experts that can solve them.” We guess that nobody jokes about what the word ‘owler’ meant in historic England. It was another word for ‘smuggler’.
Theatre. Advance Publications, parent of magazine publisher Condé Nast, has acquired Stage Entertainment, one of the world’s largest theatre producers and owners, operating 20 theatres with shows attended by over 7m visitors annually. It bought the company from CVC private equity. It entertains audiences in the Netherlands, Germany, Spain, France, Italy, Russia, UK and US. Leading productions include Disney’s The Lion King and Aladdin, Mamma Mia!, Mary Poppins, Anastasia and Tina: the Tina Turner Musical. Stage Entertainment employs more than 3,000 people worldwide. Stage Entertainment closed its UK office in 2016 but continues to have productions in London. Transaction terms were not disclosed. Does this diversification increase or reduce the chances of a magazine-consolidating ‘merger’ between Conde Nast and Hearst Corp’s magazines division?
Magazines. Readly, the five-year-old Swedish-owned digital magazine app, has raised €10m in funding from new investor Swedbank Robur and existing funder Zouk Capital, of London. The Readly app for tablets and smartphones gives customers unlimited access (on up to four devices) to some 3,200 national and international magazines for a fixed monthly subscription of c£8. This year, Readly has added Switzerland to its ‘local’ markets of Sweden, UK, Germany and Austria. Readly is expected to have revenues in 2018 of £23m (some 75% up on the previous year and more than three times that of 2016). Revenue was split fairly evenly between Germany, Sweden and the UK with other countries accounting for less than 10%. The price appeal of Readly to consumers is clear enough, and the software is good, giving readers the magazine feel with easy zoom-in pages. Readly subscribers are thought to average something like 20 digital magazine sessions per month totalling about 7 hours’ reading time. Interesting from the viewpoint of publishers (some of which are still nervous about the possible Readly risk to full-price magazine subscriptions) is the finding that some 15% of reading takes place outside the native market of the magazine content. Readly likes to compare itself to Spotify but the really interesting time will be when/if readers are able to search for topics and content across large numbers of magazines rather than only within an individual brand. Publishers might worry about the potential erosion of magazine branding involved in that. But, with digital subscriptions one of the only growing sources of magazine revenue, the money will talk. It is also assumed that Readly could develop a range of services like its US counterpart Magzter which offers a “Lite” version for access to just five magazines. You could imagine subscriptions covering just the magazines of individual publishers or even groups of publishers. Or access just to magazines about, say, football or fashion. If Readly can keep up the growth rate, its business really will become mainstream for publishers rather than just useful ancillary revenue.
Events. With 130 employees based at its head office in London’s Shoreditch, FCBI operates B2B conferences and publications in pharmaceuticals, energy, transport and insurance. Some 65% of its £30m revenue is generated in the US, 20% in Continental Europe and 10% in the UK. The MBO led by the CEO Piers Latimer marks an exit for the company’s founders. Terms not disclosed. The FCBI £30m revenue was disclosed by the Lloyd’s Bank private equity arm LDC but contrasts with 2016 losses of £600k in the UK statutory accounts, along with the closure of 130 events across the previous two years. Former Informa and EMAP B2B chief executive David Gilbertson is set to become chair of FCBI. It will need to build-out further with acquisitions and/or launches especially in the UK, so this will be a company to watch.
Broadcast-streaming. US TV group Comcast has extended the deadline for Sky TV shareholders until 12 September but is still expected to win the fight with Disney for the £26bn pan-European TV network. For Rupert Murdoch, who brilliantly built what is Europe’s most successful pay TV business over the past 27 years, it is the end of an era in more ways than one. His family have pocketed some $11bn for selling their 17% in 21st Century Fox to Disney, plus they have kept the hugely-profitable Fox News and Fox Sports, and their News Corp controls Foxtel Aussie pay TV, Harper Collins book publishers, the Wall Street Journal, daily newspapers in the UK, Australia and the US, and the ‘worth-more-than-the-whole-company’ digital real estate services REA and Move. So what will Rupert and his sons Lachlan and James do with their winnings? Well, the acquisition by the rival Australian Nine Network of the country’s Fairfax newspapers seems likely to lead News Corp in Sydney to some kind of merger or collaboration with its other competitor, the Seven Network. Seven, controlled by Kerry Stokes, also owns newspapers and Pacific Magazines (which is thought likely to be sold soon to Bauer Media Australia which owns the former ACP Magazines). Last week, the Seven Network’s CEO touted the idea of a collaboration so the heavily-indebted commercial TV network is not exactly playing hard to get. The other little post-deal challenge for Murdoch in the US involves the 22 Fox regional sports networks that Disney must now sell as a condition of buying most of 21st Century Fox. The price could be at least $15bn and other likely bidders are said to include Liberty Media, Amazon and YouTube. The reason why Murdoch did not manage to negotiate keeping the regional sports channels, alongside Fox Sports, in the first place was that Disney (the majority owner of leading US sports network ESPN) had wanted to keep them. But it has been forced now to divest. En passant, we should assume that one post-Sky strategy for Rupert Murdoch will be a global roll-out of Fox News. But Sky News + Comcast’s NBC might become an even stronger competitor.
B2B information. FarmWizard, the Belfast-based provider of agricultural software has been acquired by AgriWebb, of Sydney, as part of a wider £8m (A$14m) deal, which includes a seven-figure investment from new minority shareholder the UK-based Wheatsheaf Group which has owned a majority in FarmWizard since 2015. It is believed Wheatsheaf will now own almost 30% of AgriWebb, the privately-owned farm management software company which was founded in 2014 by a fascinating US-Australian trio: US-born, sometime school teacher and software entrepreneur Kevin Baum, former barrister John Fargher, and Justin Webb, an ex hedge fund owner (and international rowing champion). Webb and Fargher are from farming families and it was their data-primitive use of record-filled notebooks that had inspired the launch of AgriWebb. It is a cloud-based software-as-a-service livestock management platform designed to “digitise the notebooks that sat in the top pockets of Australian farmers”. The potential was quickly recognised by investors, helping to raise A$500k in 2015 and a further A$3m in 2016. The company also received a A$600k grant from the Australian government. Webb says: “Our early investors had all come to the fundamental realisation that agricultural production must meet the shift in demand. With farming land under competitive demand, the onus falls on increases in productivity through the conduit of technology to solve the shortcoming of a potential global food crisis.” Four years ago, the company began with a handful of farmers using an iPad-only app. AgriWebb is now Australia’s market leader in livestock software, with customers and enterprise clients across Australia and the UK, South Africa and Brazil. Globally, it is now used on 2,700 farms (1,700 of which are in Australia). The acquisition of FarmWizard came about as a result of Wheatsheaf’s approach to AgriWebb whose founders said the deal would “transform the future of digital agriculture”. FarmWizard’s dairy focus and individual animal management functionality is said to complement AgriWebb’s focus on pasture-based livestock management systems prevalent in Australia. The only slightly discordant note of the deal for a brilliant Aussie company is that there is, confusingly, the “Agri-web” company, based in FarmWizard’s Northern Ireland, which supplies “rubber grading screens” to the worldwide agricultural market. The six-year-old Wheatsheaf Group is part of the Grosvenor group belonging to one of the UK’s largest landowners, the gilded Duke of Westminster. Wheatsheaf is a leading global investor in, and developer of innovative food and agtech businesses “to help meet the food requirements…of a changing global population”.
Events. The largest US-owned exhibitions organiser, Emerald Expositions has acquired a group of tech shows from EH Media for $28m. The events include: Total Tech Summit; CEPro; Commercial Integrator; Security Sales & Integration and Campus Safety. The deal serves to focus attention on Emerald whose ancestry includes VNU, Bill Communications, Miller Freeman US,Nielsen, Onex and George Little. The $1.2bn quoted company, which has more than 55 trade shows (32 of which it describes as “large”), has been highly acquisitive but its shares have crashed 26% in the past year and are now some 5% below the 2017 IPO price. With attractive EBITDA profit margins of 45%, the problem is sluggish revenue growth. Blackstone, which bought the UK-based Clarion Events for £600m this time last year, is looking to build a world leader in exhibitions. It would love to get its hands on Reed Exhibitions when (if) it is put up for sale by RELX, the UK-based information parent. But, if Emerald’s shares continue to under-perform, the US group could become an easier target. A Clarion-Emerald ‘merger’ would become one of the the world’s five largest exhibition organisers with strong and growing positions in the US, UK and Asia. It would actually be the third largest independent organiser after Informa and Reed. Blackstone must surely be doing the sums.
B2B information. Washington-based FiscalNote has completed its acquisition of CQ Roll Call from The Economist Group for $180m through a combination of cash and equity. The Economist Group gets an 18% share in FiscalNote. As part of the transaction, S&P Global also takes a strategic equity investment. FiscalNote Founder and chairman/CEO Tim Hwang remains the largest individual shareholder in the company which, he says, “began out of our desire to answer a fairly simple question: why isn’t there a way to keep track of what’s happening in government — at every level — in a simple, comprehensive, and reliable way?” That explains the five-year-old company’s success but what remains a mystery is why The Economist wanted to sell its long-term media asset CQ Roll – and partly for a minority shareholding in a newish, albeit high-rated, company.
News. Local news web site OKCTalk.com has acquired Tierra Media Group, the parent company of Oklahoma Gazette. The weekly newspaper’s founder and publisher for 40 years, Bill Bleakley, is passing control to Peter J. Brzycki, owner of OKCTalk. Under what the two owners described as “a merger”, the two news brands will be owned by a newly-formed company OKC Next Media. An Oklahoma native, Brzycki began his career in real estate and management consultancy in California. This newspaper-web merger seems to be a good idea for quite a few much larger news properties round the world, doesn’t it?
Magazines. Former casino owner Bill Paulos announced has bought GamingToday, the 40-year old Las Vegas sports and gaming tabloid weekly, as more American states legalize gambling. Paulos, who owns Engaged Nation, an online gaming system, did not disclose how much he paid for the weekly paper and website or how many unique viewers it has. GamingToday, founded in 1976 by Chuck and Eileen Di Rocco, is famous for its 39-year-old “Bookie’s Battle” contest which determines which is the best forecaster over the course of the year. Paulos was the co-founder and owner of Cannery Casino Resorts which he sold to Boyd Gaming Corp for $230m in 2016.
Broadcast-streaming. Gray Television has agreed to sell nine stations in eight markets to three different buyers, clearing the way for the FCC to approve its $3.6bn merger with Raycom Media. Last week, it said it had agreed to sell its CBS affiliate WSWG Albany, Georgia, to Marquee Broadcasting. The combined purchase price for all the divestitures is $235.5m, apparently more than Gray had expected. The lastest deals are: Lockwood has agreed to purchase Fox affiliates WTNZ in the Knoxville, Tenn., market (DMA 61), WFXG in Augusta, Ga. (DMA 112), WPGX in Panama City, Fla., (DMA 151) and WDFX in the Dothan, Ala. market (DMA 173); E.W. Scripps has agreed to purchase ABC affiliates KXXV-KRHD in the Waco, Texas, market (DMA 86) and WTXL in Tallahassee, Fla. (DMA 108); Tegna is buying CBS affiliate WTOL Toledo, Ohio (DMA 78), and NBC affiliate KWES Odessa-Midland, Texas (DMA 144). Gray did not break out the prices of the four deals. But, in separate announcements, Scripps said it was $55m for the Waco and Tallahassee stations and Tegna said it was paying $105m for those in Toledo and Odessa-Midland.
B2B information. SAI Global, the provider of “integrated risk management solutions” which was founded 96 years ago to write the standards and technical documents involved in the construction of Sydney’s iconic Harbour Bridge, has acquired Strategic BCP ResilienceONE. Transaction terms not disclosed.
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