The UK’s acquisitive B2B publisher Mark Allen Group (MAG) has bought 13 magazines and newsletters from RELX subsidiary Elsevier for a cash consideration believed to be some £1.5m – about 1.5 x revenue. The brands – which operate in metals, plastics, biometrics, fuel and filtration, and computer security – include Metal Powder Report and Reinforced Plastics.
It’s a relatively small deal, of course. But MAG’s financials for the year ended 31 March 2020, highlight its successful M&A which, in 2019-2020, included £20m spent on the acquisition of: auto and aviation brands from UKi; engineering magazines and events from Centaur Media; and Farmers Weekly from RELX, as follows:
|Acquisition||Date||Net price||Rev*||Profit*||PE **|
|Farmers Weekly||Jan 2020||£12.6m||£1.8m||£580k||4x|
Notes: *Revenue and profit as recorded for part of the year ended 31 March 2020. ** PE multiple based on an estimate of normalised annual profit
The standout deal was Farmers Weekly. MAG’s largest acquisition cost £12.6m from RELX – an estimated pe of x 4 for one of the UK’s strongest B2B brands whose revenue principally comprises a steady 38k paying readers.
Meanwhile, that deal almost marked the end of B2B magazine publishing by the former Reed Business Information (RBI) which has been successfully transformed into a global data-tech group over the last 10 years. But not quite. The RELX subsidiary still publishes the 163-year-old Estates Gazette (bought for £59m in 1990) as part of its property information portfolio, which is why that magazine is said not to be for sale. Don’t bet against MAG buying that too, sometime.
For the eponymous Mark Allen, it’s all a long way from the dishevelled former daily newspaper journalist who had joined RBI as launch editor of Community Care. It was a controlled circulation free magazine for Britain’s social services in the money-spinning 1970s, when UK weeklies were stuffed with employment classifieds. Subsequently, after an unrewarding spell at International Thomson, Allen left with the medical magazines he had been managing for the fickle B2B publisher. That was the 1985 start of MAG.
The learn-as-you-go entrepreneur’s early experience in running conferences alongside B2B magazines prepared him well for a time when (pre-pandemic) events so often became the main earners in B2B media. The company’s growth has also reflected the founder’s enthusiasms for content-rich professional media (30% of his people are journalists), the social-health-education-engineering sectors – and music.
MAG now has 100 B2B publications and 12 exhibitions across 15 sectors. In addition to Farmers Weekly, its strongest brands include: Ground Handling International, British Journal of Nursing, Eureka!, Optician, Gramaphone – and the 47-year-old Community Care acquired in 2017.
The company has made 30 acquisitions during the past 15 years at a cost of almost £60m. Some of the smarter deals have had a payback of less than 12 months. Mark Allen has earned his place among the leaders of UK-based publishing. It’s almost impossible to find an employee, past or present, who hasn’t enjoyed their work at the bustling UK media company whose headquarters is a converted 152-year-old church in south London. Mark Allen is chair (and principal deal-maker and sometime novelist) while his son Ben manages the business as CEO.
Although MAG’s 2019-20 results were impacted by exhibitions lost in the first weeks of the pandemic, four years of financials tell the story of what has been the UK’s fastest growing B2B publisher and which is expected to have resumed its growth (and 17% EBITDA profit margin) in 2021:
|Year to 31 March||2020||2019||2018||2017|
The family-owned group generates 43% of its revenue from advertising, 30% from conferences, and 18% from subscriptions (which will increase sharply with Farmers Weekly from 2020-21). Some 79% of revenue is from the UK, so we might expect more international deals, especially now the company has started to use modest levels of bank debt to fund acquisitions.
So many things about this UK company are nicely counter-intuitive: for all the digital and events growth, print magazines and advertising are still core business; and its 473 headcount has increased by 68% in five years.
What companies and brands will the Mark Allen Group get to work its magic on in post-pandemic 2022?