Everybody in UK media likes Centaur: employees, journalists and even long-suffering investors who have stuck with its under-performing shares for a decade and more. The £70m-revenue UK company has been a prominent part of B2B media since the 1978 launch of Marketing Week by founder Graham Sherren. But now it’s preparing for a January sale.
An October profit warning came with an investor-soothing decision to sell-off almost half of its business and stick only with the marketing services division. The company has appointed Livingstone (which recently clinched the £166m sell-off of Dennis Publishing) to handle the sale of The Lawyer. Cavendish (part of Oaklins worldwide) will advise on the potential sale of Centaur’s events division (including the Business Travel Show, The Meetings Show, SubCon, and Employee Benefits) and its financial brands Money Marketing, Mortgage Strategy, Platforum, Taxbriefs and Headline Money. It will be a lively auction.
The Lawyer, which has revenue of some £8m, potential profit of £2-3m and has increased its digital income five times in three years, may attract bids of £30-40m. Inflexion private equity may be the first in line. It is the owner of legal publisher Chambers whose CEO Mark Wyatt is a former publisher of The Lawyer. Wyatt also founded Legal Week which is now published by ALM/ American Lawyer. The US publisher is owned by Wasserstein which may also be interested in acquiring The Lawyer.
They would join other bidders including News Corp’s The Times (which has been seeking to grow its involvement in UK legal publishing), the Financial Times, ThomsonReuters, and Bloomberg, most of which will also be interested in the financial portfolio. And, of course, the massed ranks of cashed-up private equity.
Centaur’s six exhibitions have £12m revenue (25% up in four years) and are being marketed at a time of high activity in tradeshows. (In France, the sale of the Paris-based Comexposium – one of the world’s top five – may be underway. In the UK, Inflexion is selling its minority stake in the 10-year-old CloserStill whose £55m revenue, 50% EBITDA margins, and prodigious growth rates will attract some rich offers. Private equity bidders are favourites for both).
Centaur Media’s big sale may have unintended consequences for CEO Andria Vidler and her team. Pushy shareholders are well aware that selling almost half of Centaur’s business (for what may prove to equal the market cap of the whole company), will be payday but will leave them with a distinctly sub-scale listed media company. That is why we should expect at least some rivals (invited or not) to bid for the business that Centaur theoretically expects to retain.
The hot tip must be the increasingly international Ascential Plc whose Cannes Lions, MediaLink, and WARC businesses would complement Centaur’s Marketing Week, Festival of Marketing, Creative Review, Celebrity Intelligence, Oystercatchers, and eConsultancy. There’s Centaur consulting synergy with Ascential’s WGSN’s trends information business and the World Retail Congress and Retail Week. The combination would create a world of data and events possibilities for the impressively growing £1.6bn Ascential.
Those – and the obvious options for expanding The Lawyer into the countries that share a British-based legal system – emphasise the unfulfilled promise of Centaur Media. While the 40-year-old company has made good digital acquisitions, built strong audiences and subscription information services, and cut costs, its sprawling portfolio (and print-dragged lacklustre revenue) has been largely confined to the UK.
The publisher, whose heyday was characterised by highly-successful low-cost launches of weekly B2B magazines stuffed with jobs advertising, has struggled to find new growth. Its 2004 IPO valued the company at £148m, more than double its current market cap. But, in the intervening 14 years, it has simply lacked the firepower to fulfil its promise and having three Chairs in the past three years will not have helped.
Perhaps a much-discussed plan to merge with advertising intelligence company Ebiquity (now itself under pressure) could still work. A long speculated merger with Wilmington Group now seems unlikely. But even Centaur’s success in selling its Homebuilding consumer magazines and exhibitions to Future Plc for £32m – 8x EBITDA – inevitably diluted profits. Paying off low-cost debt is a mixed blessing for any listed company and is usually the tell-tale sign of nowhere to go.
Focusing now on the marketing sector may just give Centaur the chance to dream of becoming a global information provider – but probably only if it can find a transformational deal. If it’s not too late.