Media Fortune Fame & Folly

The 7 lives of Incisive Media

It is 20 years since Tim Weller floated Incisive Media on the London stock exchange. The publisher of Investment Week, Post, and Bloomberg Money was valued at £75m six years after launching with capital of £275k. For its investment banking shareholders, that meant a return of 110 times.

Weller was an almost accidental entrepreneur. He had been publishing director of Money Marketing and The Lawyer at the high-flying Centaur Media, in the UK heyday of recruitment classifieds. He was headhunted to create B2B publishing for Reuters but his move triggered a speculative story in Centaur’s Marketing Week claiming the appointment meant that Reuters might acquire Reed Elsevier. That was news to the Reuters board which hadn’t even known about Weller’s appointment or the B2B ambitions of his boss. After six frustrating months, Weller was given a year’s pay in compensation and left, armed with his plan to launch a weekly for financial intermediaries that Reuters hadn’t even considered.

  1. Startup (1994)

Katie Potts, founder of Herald Investment Trust, pulled in former Warburg colleagues to invest while Weller polished up his plans for Investment Week.

With a house whose recessionary value was less than his mortgage and three children under five years of age, Weller injected the remaining £30k of his Reuters pay-off (plus some salary sacrifice) into the new venture. EMAP’s David Arculus had advised him to raise at least £1m but Weller was confident he didn’t need that much. He wanted to keep control.

Investment Week was to target the highly-profitable, recruitment-funded market served by his erstwhile employer Centaur, and the Financial Times. But, ironically, also EMAP whose Money Week was a failing no.3. Having been offered the chance to acquire Money Week, Weller’s master-stroke was to ensure his new publication could breakeven if only he matched its £1.4m revenue. He achieved it by top-slicing the controlled circulation readership. The result was almost immediate profit – even though EMAP was still losing money several years after its own launch. Money Week’s subsequent closure (soon after Weller rejected the chance to buy it) gave him a home run – and reinforced the low-cost lessons of his apprenticeship at Centaur.

He started his City Financial Communications (CFC) with the £275k fundraising, 13 staff, some borrowed furniture, an office with a hole in the roof, and bills charged to his personal credit card. In 1995, it made a first-year profit of £68k and still had £226k in the bank. The following year, profit was £300k with £835k in cash. By 1997, the company was making £600k as it launched seminars and conferences. In 1999, profit had leapt to £1.8m and the company had £2.7m of cash. As it prepared to IPO.

2. IPO (2000)

Ahead of the float, CFC acquired Timothy Benn Publishing (TBP), owner of Post and the British Journal of Photography (yes), which the prospectus described curiously as “two of the oldest magazine publications in the UK magazine market”. The two companies (brought together as Incisive Media Plc) had pro forma financials of £19.4m revenue and £2.4m EBITDA. For Weller, the IPO gave him £6m in cash and a 16% shareholding worth £11m. His startup shareholders – including Katie Potts and Numis’ star media analyst Lorna Tilbian – were pretty pleased too.

It signalled the start of acquisitions including the Matching Hat mortgage brands, Risk Waters, and Insurance Age, as the company continued its rapid growth, doubling revenue in four years to reach £46m in 2004. But Incisive became known as much for the deals it didn’t do as for those it did.

It won a crowded race of bidders for Financial Times Business whose brands included Incisive’s key competitor Financial Adviser, and Investors Chronicle. But, having tabled his winning bid of some £70m, Weller walked away and the business was withdrawn from sale. Investors cheered his “head not heart” decision; he knew the advertising markets were starting to crumble.

Weller’s heart was definitely in the 2004 bid to acquire his alma mater Centaur Media which was put up for sale by its majority owner Veronis Suhler Stevenson over the head of founder-chairman Graham Sherren. In the event, Sherren and Incisive’s own broker Numis snatched back the company by way of a bizarre “accelerated IPO” which saw it bounced onto the stockmarket a few months later with a value (never to be repeated) of £130m. Weller had been out-smarted by his former boss and his current broker. He also flirted with private equity bidding for Reed Business Information in 2008, before the then Reed Elsevier changed its mind and decided (eventually) to build its whole strategy around the company it had wanted to ditch.

3. Public to private (2006)

Tim Weller was a media star. But the novelty of public ownership had worn off by the time Apax persuaded him to take the company private. The £200m MBO spawned newspaper profiles about the former advertising sales executive with an Aston Martin in the drive, a ski chalet in France, and £11m in the bank, just 11 years after he had launched the company. He was appetised by Apax’s willingness to give Incisive the acquisition funds to become a global success. He was captivated by its soothing presentation “The Benefits of Debt”.

Over the next six months, Incisive used cheap loans to buy four businesses and double its revenue. They included VNU Business Publications where Weller had begun his career on Computing magazine 20 years before. By 2007, Incisive’s leverage was £445m – 9 x EBITDA which had increased 2.2 times to £55m. Time to go global.

4. The US plunge (2007)

In August, 2007, Incisive paid £315m ($630m) – about 3 x 2006 revenue – to acquire ALM (formerly American Lawyer Media) from Bruce Wasserstein in a deal which doubled the company to an enterprise value of more than $1bn. ALM was publisher of 33 magazines and newspapers focused on the legal and real estate communities, including: The American Lawyer, The New York Law Journal, Corporate Counsel, and The National Law Journal.

The trade magazine Folio was as excited as Weller: “Incisive Media is on the fast track… the UK-based publisher has evolved from an entrepreneurial startup to a B2B powerhouse, thanks in part to Apax Partners, a $20bn private equity fund that backed CEO Tim Weller’s $550m buyout of the company in December 2006. The opportunity is huge.”

He was still riding high when his private equity paymaster and The Guardian together acquired EMAP’s B2B division – and wanted to merge it with Incisive. The opportunity to manage what would become the UK’s largest B2B publishing and events company seemed like a dream come true. But corporate debt levels and personal judgements got in the way.

The timing just wasn’t right. That’s also how it proved to be for Incisive’s transformative acquisition in the US.

In 2008, the global financial crisis caused the non-ALM part of Incisive to break its banking covenants which frustrated efforts to syndicate the $550m RBS had lent for the US acquisition over the £260m of debt held by 21 banks in Incisive Media itself. As B2B media values collapsed, the debt structure so painfully put together for the ALM deal became unsustainable.

The upshot was that RBS swapped its debt for 82.5% of the equity in 2009 and effectively became the owner of Incisive Media. (In 2014, ALM was sold back to Wasserstein for about two-thirds of what Incisive had paid for it.)

5. Owned by the bank (2009)

Having been forced to give up management control of the de-merged ALM, Weller and longtime co-director Jamie Campbell-Harris got a 10% share of the “new” RBS-controlled UK company. It was painful for the founder: “I have had to work from seven in the morning until late every day for the past year trying to save the business. It has been a humbling lesson.”

He had become scathing about private equity: “The amount of debt was never discussed at board meetings. In a downturn, debt is brutal; it is a killer. In the first few months after the buyout, you look at all the good stuff – the extra profits, earnings are growing. We had no idea how quickly the money would disappear and how much we would have to focus on cost cutting. We are glad to be shot of private equity…Apax brought no operational understanding to our business. They were brilliant at dealmaking and financial engineering.”

6. Alchemy sell-off (2015)

In 2015, RBS sold its majority stake in Incisive Media to Alchemy private equity. Over the next two years, it sold assets to Acuris, Contentive, and ALM for a total of some £50m.

The sell-offs culminated in the 2017 divestment to Infopro of Incisive’s insurance and financial services “Insight” division for £120m – 10 x EBITDA and 3 x revenue. Alchemy’s return from Incisive was 2.7 times its investment in less than two years. It was time to get back to the future with what was left.

7. Back on the runway (2017)

Team Weller’s reward for the Alchemy pay-off was getting back the ownership of Incisive Media. For a mere £5k, they acquired 100% of the debt-free company which, within a year, had £23m revenue/ £3.1m EBITDA. In a neat piece of negotiation, they bought a lossmaking company whose negative net worth derived from the contingent liability of subscriptions and redundancies – including Tim Weller and Jamie Campbell-Harris with 20+ years’ service.

In the event, the two founding directors stepped back from the day-to-day and handed control over to longtime colleague and CEO Jonathon Whiteley. His team is now building a strategy round the inter-linked subjects of finance, technology and sustainability, moulded from the rump of the old company.

It’s been a speedy turnround.

After four years, the “new” Incisive has, in Whiteley’s words, been “making good profit in the worst of times” through tight cost control, digital events, and the development of membership models to push revenues away from a traditional 70% dependance on marketing budgets.

Even in Covid-year 2020, it made a 15% EBITDA margin (only slightly down on the previous year) on revenue of £17.5m ( -23%). This year, it may get back to £20m and profit of £3m+. It also has net cash of £9m which should equip it to buy-up some B2B companies and brands battered by the pandemic, especially those waiting wishfully for the return to ‘normal’ that may never arrive.

Although it has come a long way in this latest incarnation, the smart company is small again and will either become the diner or the dinner in post-Covid consolidation. The accelerating B2B trend towards ever narrower and deeper specialisation is both the risk and the opportunity. Of course.

Meanwhile, Tim Weller is preparing for the IPO of Trustpilot, the ubiquitous Danish review website he has chaired for the past eight years. Its valuation may exceed the £1bn price tag enjoyed by Incisive Media for one brief shining moment back in 2007.

It highlights the versatility of the Incisive founder who has quietly spent the last decade in a parallel life as chair, non-executive director and investor in companies right across the media-technology spectrum, in broadcasting, digital media, video games, advertising, magazines, and printing. The stretchy non-executive track record has been almost overshadowed by 27 years of drama in the day job.

Weller is one of the UK’s most experienced media operators and has never knowingly turned down an opportunity to try something new. This month, he has added the chair of the Sohonet movie content network to his cluttered CV. He remains a cheerfully extrovert entrepreneur, well-organised and fiercely intelligent – even when he might let you think otherwise.

In his “Look Mum!” thoughts, he may ponder the contrast between the impending IPO of the star-studded Trustpilot and that of Incisive which stumbled on to the stage 20 years ago. It’s been a spell-binding two decades. But Tim Weller is the same fast-talking, always-learning, loyal boss, colleague and friend who can persuade almost anyone. And he really is incisive.

Incisive Media