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Incisive Media: from £5k to £45m in five years

 

The UK-based B2B Incisive Media has been acquired by EagleTree Capital for a cash price believed to be £40-45m – 10 x EBITDA in 2021 – just five years after its founders had paid a mere £5k to reclaim the business.

The portfolio is to be divided between two EagleTree-funded companies.

Arc Media Holdings, of the UK, has acquired Incisive’s financial services and sustainability portfolio, including Investment Week, Professional Pensions, and BusinessGreen. The Channel Company, of the US, has bought Incisive’s technology portfolio including Computing, Computer Reseller News, and Channel Partner Insights.

Incisive Media CEO Jonathon Whiteley is joining Arc whose formation in 2021 was followed by the £20.5m acquisition (7 x EBITDA) of the UK agriculture publishing and events of AgriBriefing. Arc is led by Simon Foster, a longtime senior executive of former trade show group UBM, who was latterly CEO of the Paris-based exhibition organiser Comexposium.

The deal is certainly a breakthrough for Arc and for Foster’s ambitions to build a diversified B2B group. But it is even more significant for the Incisive founder Tim Weller who has bought and sold the business four or five times in the 22 eventful years since he floated it on the London stock exchange with a value of £75m. He had launched it in 1995 with capital of just £275k.

Weller had been a director of Centaur Media, in the UK publishing heyday of recruitment classifieds, and was headhunted to create a B2B publishing business for Reuters. But, 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 bothered to consider.

It was the start of the seven lives (and 27 years) of Incisive Media:

1.Startup (1995)

Katie Potts, founder of the London-based 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.

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. Two years later, profit had leapt to £1.8m and the company had £2.7m of cash. 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. 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.

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. But founder-chairman Graham 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. Weller 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 once wanted to ditch.

3. Public to private (2006)

The novelty of public ownership had worn-off by the time Apax private equity persuaded Weller 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. Incisive used cheap loans to buy four businesses and double its revenue. The acquisitions included VNU Business Publications (where Weller had begun his career 20 years earlier). By 2007, Incisive’s leverage was £445m – 9 x EBITDA. 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 legendary dealmaker Bruce Wasserstein in a deal which doubled the company’s enterprise value to more than $1bn. ALM was publisher of 33 B2B magazines and newspapers including: The American Lawyer, The New York Law Journal, Corporate Counsel, and The National Law Journal.

Weller was still riding high when Apax and UK news group The Guardian together acquired EMAP’s B2B division – and wanted to merge it with Incisive. Weller’s golden 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 that 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 two-thirds of what Incisive had paid for it.)

5. Owned by the bank (2009)

Having been forced to give up control of the de-merged ALM, Weller and CFO 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 the Paris-based Infopro Digital 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. For Weller, it was time to get back to the future with what was left of his company.

7. Independent again (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. Within a year, it had bounced back with £23m revenue / £3.1m EBITDA. In a neat piece of negotiation, they had bought the lossmaking company whose negative net worth derived from the contingent liability of subscriptions and redundancy payments – including what would have been due to Tim Weller and Jamie Campbell-Harris with their 20+ years’ service.

In the event, the two founding directors stepped back from the day-to-day and handed control over to 24-year colleague and CEO Jonathon Whiteley whose team has successfully built a strategy in finance, technology and sustainability, from the rump of the old company.

It has, to say the least, been a speedy turnround – despite the pandemic effect on revenues which had been 50% from events in 2019:


£m
2021*2020201920182017
Revenue22.517.522.823.014.6
EBITDA 4.5 2.1 2.8 3.1 1.1
Margin20%12%12%13% 7%
*Flashes & Flames estimate/ Incisive Media filings

The scale of achievement by Whiteley and his executives is underlined by the fact that the 2021 numbers included just one month of resumed live events – so total revenue may have been expected to exceed £25m with the resumption of events in 2022.

Its been an impressive reinvention marked by: the switch to all-digital of Investment Week and Professional Pensions just before the acquisition was completed; and also by the impending launch of two new digital brands, Sustainable Investment and Investment IQ. Incisive has become focused entirely on digital media, lead generation, and events. No more print.

In Whiteley’s words last year, the company had 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.

The dramatic recovery in 2021 has helped to achieve an exit price that would have seemed inconceivable just two years ago. The CEO and his team (who together owned 20% of Incisive shares) get their reward with a windfall of almost £9m.

The acquisition is an opportunity for Jonathon Whiteley to play a major role in the development of Arc, for which Incisive delivers high-performing critical mass. It is their best business and Whiteley himself adds real bandwidth to Simon Foster’s ambitious startup.

Meanwhile, Weller is the non-executive chair of six mainly-tech companies across the UK, US and Poland. For almost a decade, he has been at the helm of Trustpilot, whose IPO valuation last year exceeded the £1bn price tag enjoyed by Incisive Media for one brief shining moment back in 2007.

As the founder enjoys his latest payday (he and Campbell-Harris owned 80% of Incisive and they have also shared the payout of the company’s £10m of surplus cash), he might be reflecting on the irony that Incisive has been bought by EagleTree. It’s a spin-off from the Wasserstein investment company whose sell-and-buyback of American Lawyer had brought him such pain during 2007-14.

It’s been a spell-binding two decades, the stuff of movies. But Tim Weller is the same enthusiastic, fast-talking, always-learning, loyal boss, and colleague who can persuade almost anyone. He’s done it again.

Incisive Media