Arc Media Holdings is the six-year-old, UK-based, pe-owned B2B company founded by trade show veteran Simon Foster (ex UBM and Comexposium). It currently organises more than 150 events annually and has publishing platforms in HR, agriculture and food, financial services and education technology across the US, UK, Netherlands, and Singapore.
Arc’s early months marked an explosive start, even before the post-covid rebound of events.
The EagleTree-owned company has invested an estimated $450mn on 10 acquisitions (primarily in the US and UK) More than 50% of the investment was for the educational and HR tech divisions of Ken Kahn’s LRP Media Group, in the US. Last year, Arc also acquired the EagleTree-owned finance and insurance publisher Touchpoint Markets, spun-out of ALM Media (publisher of American Lawyer) which had merged with Law Business Research.
Arc is believed to have revenue of more than $100mn, up to 70% in the US. About 65% is events. This interview is adapted from Foster’s talk with Colin Morrison at Monetising B2B, in London, last month.
When, why and how did you start Arc?
In 2020, I had just finished at Comexposium, France’s largest event organiser and private equity owned. It sold for something like £1.6 billion back then, so it was a big deal. I’d previously spent 19 years at UBM, which was primarily known for being in the events industry. I love the events industry, and we’re going to talk a lot about it today. But what’s often forgotten is that in my time at UBM, we also spent a lot of time in publishing.
As I’ve said, unashamedly, I closed lots of B2B magazines at UBM, which is both positive and negative. It was very positive from a financial perspective, but was really a reflection of the times we were in. After Comexposium, I wanted to try and build something that reflected what I’d learned both there and at UBM where I probably did the best part of 100 acquisitions. So, I had dealt with a lot of large and small businesses, and managed a lot of integration and growth.
I don’t think I’m an entrepreneur. I have a huge amount of admiration for everybody who’s been a proper entrepreneur and started something from zero. I’ve never done that before, but I felt I wanted to use my experience to build something.
We might say we sold Comexposium in 2019 because we were the only people who saw Covid coming, which is clearly a lie. But, if you think back to that time in 2019, there were some real challenges and the events industry was still seen as quite brittle. It was (and is) a hugely strong business model but it was being challenged by “new” factors, primarily data insights, content and the need to prove RoI.
We were seeing NPS scores at rock bottom for almost all events globally. We weren’t even really talking about the power of face-to-face like we do today.
Obviously, Covid – and the bounce-back – has changed all that but, back then, the power of events was really not believed by everybody, including many marketers. We were also just developing what digital content meant, as opposed to print content.
That change and challenge was the basis of what I wanted to do. UBM had been a business that virtually came from media into events and, today, many people are talking about events businesses going from events into media and information.
I wanted to try and start a business that did it all.
The real connection was live and face-to-face events which are always at the core of what we do. But I also wanted to build on events the trust that can be generated by exceptional content. I don’t just mean white papers, articles or journalism. All forms of content that can help people achieve their business objectives. I wanted to make sure that we were able to drive RoI for customers. As Alex Roth, strategy director of Informa said earlier, the imperative is to deliver for people beyond just the live event and that means wrapping digital content around the event experience.
As I contemplated the formation of Arc, I was really excited to see what we could do and what we could build in this changing world.
Before UBM was acquired by Informa in 2018, had the company (more or less) abandoned publishing and information in order to major on events?
More or less. It was not as dramatic as that. The strategy was referred to as “events first”. Undoubtedly, we moved away from publishing. Ironically, in the brands that I managed then, we were just just beginning to try adding more content, for example to the worldwide CPHI events, in order to drive business beyond the events schedule. But, arguably, we weren’t doing a very good job.
Was your motivation in setting up Arc, therefore, to create a fusion of information and events?
I still say content and information are the same thing, whether they’re live, digital or whatever. You’re enhancing the user-visitor experience. I try not to distinguish between media and events because, with every single acquisition, we have focused on the community.
We’re in good, strong markets, and I wanted them to have three key characteristics: a strong content model beyond the live event, obviously strong, well-known brands in terms of what they were doing and the live events themselves, and then I also wanted the potential to build a membership model in the respective community. I deliberately call it membership. I don’t just mean subscriptions which are simply the way you pay for membership. Membership itself is about belonging, about being part of the community, and that’s what we’re trying to grow. Whether that’s paid for (and, clearly, I and most other people like paid-for membership) or whether it’s permission-based, membership is very important to what we do. The experience we seek to give members is linking all of those together.
How did you go about launching Arc?
I’d love to tell you it was great fun, which it wasn’t really. I had finished to spend some time with my daughter because I was missing her being in Paris, and then spent 400 days in lockdown with her totally, which wasn’t, of course, expected. It was also painful sitting and watching the industry paralysed by Covid. But it was hard for everybody.
Two things became important to me.
There were several people who wanted to be part of the journey and understood what we wanted to do and had a bit of spare time. They wanted to help. Several of the people in this room helped to found Arc. I also found partners in a small niche bank called Canson Capital, which had been involved with trade show deals and knew the industry. We teamed up to find the funding.
Canson helped organise the funding, produce the debt and helped me think about the structure. As I think back, even in the middle of Covid, there were PE houses interested in the business. They felt the B2B events business was going to bounce back and wanted to be there to back it.
We went around a dozen different PE houses, talking about the pipeline, talking about what we had. By early 2020, we had two firms that were our preferred backers. I happily chose our funder EagleTree Capital, which has a long history in this industry, having owned Penton, ALM and Northstar, to name but a few. It also had my CFO from UBM working with them. That was really positive.
What I think was interesting, though – especially during Covid – is that we didn’t sign an agreement with something already in due diligence. We signed an agreement in May 2020 that EagleTree would partner with me and the team to build a new platform, and that we would do that for a period of two years. If nothing had happened after those two years, then we’d move on. But we had two-year exclusivity. So we actually signed without anything specific to acquire or launch.
That was when it became really hectic?
We actually made our first acquisition in August 2020. We did a total of six deals in succession, one a quarter for six quarters. Behind that dramatic story, we must have been in 15 or 20 processes, so there were a lot of things that didn’t work out..
I wouldn’t necessarily recommend anyone doing that. It was tough but we were buoyed by our pipeline and by the enthusiasm of people who wanted to bring the business together. We were lucky to be working with partners who knew the industry and were keen to drive things forward.
The first deal we did was buying Farmers Guardian, a 182-year-old publication and LAMMA, the UK’s largest farming show which has grown 70% over the past few years. But what’s more important is the digital membership of Farmers Guardian. The transformation has moved very quickly. It didn’t feel like it was moving quickly at first, but it accelerated. Although the print magazine is declining slowly, digital membership and readership have been growing ever faster which is, of course, very important.
People have often asked me what was our target for the size of Arc. We didn’t actually have a set number. We just wanted to build a platform of scale and we reached that fairly quickly with our sixth acquisition, the US-based LRP business, in HR and education tech. It had a combination of content models, large-scale events and membership, which brought us significant scale.
More than that, it meant that we had then become more of a US business than a UK/EU one, with some 60%+ of revenue from across the Atlantic. That was really important because of the potential growth opportunities in the US.
What have been the learnings of the six years since that first acquisition?
I joked when I said I wouldn’t again choose to buy as many businesses in a row at the start of a company. But I probably would.
But the bit I certainly underestimated was how hard it is to bring businesses together when you don’t already have an existing mothership or core operation. We didn’t have an HR system or finance people. We had to build them very quickly. Whenever I’d done acquisitions before, we were bringing them into an existing business. We were taking the best and the worst of each and bringing them in. Here, we literally were building a tapestry, sewing six businesses together at the same time as buying them.
That was a tough part of the challenge.
Within that, we found we had a mixture of people. I don’t just mean quality of people; a mixture of people. We really had to find the right people, with the right skills and the right motivation, which was also key in bringing it all together. It took us time to do that, because I didn’t start with a core set of people who were driving it.
You have referred to your company as the ‘Arc Network’. Was that key to your strategy?
It’s actually ‘network’ with a lower case ‘n’. Our name is actually Arc.
The network idea was really that I wanted to focus on the brands that are facing the customers and build our systems and our networks behind that. One of the things I always loved about UBM was the ability to share expertise and build horizontal platforms, something we are doing very much now – but without too much bureaucracy.
We’ve switched the strategy a little bit. I wanted very much to focus on the communities, and we’ve had to focus much more on bringing in experts in events, and in membership and marketing services rather than generalists. That was one of the things we learned as we were putting the company together. So, yes, the network has become a bit more of a mothership, or Death Star, as we used to call it at UBM!
What I wanted was to make sure we maintain that brand-focus discipline. We maintain that core element of what we want to do in the strategy. More than anything else, I’m trying to maintain agility, because agility was, for all the positives of the large organisations, always the challenge. It’s making sure we maintain both scale and agility.
How big a central team do you have?
We are as decentralized as we can be. Less than 10% of our people are in the centre. But we’ve restructured our business and have a central content operation, with content people embedded in each of the marketplaces. We’ve also got a very strong, data-driven content team, and the same with marketing services.
What’s your advice to others seeking to build a new business?
I would say less haste, more speed.
We were very quick to try and do stuff quickly and not always for the best. I’d also repeat some of the obvious things, like getting the right people in the right place, making sure you’ve got the right structures to get the job done. They sound really obvious (and almost embarrassing to say) but we had to re-learn that. But, more than anything else, I would advise people to be very clear in your vision and ambitions. The basics are really important and – as someone said earlier – if you neglect the basics, they come back and occasionally punch you in the face!
