M&A Scorecard - March 2007
digital magazine vendor community made M&A waves in February when
Zinio was purchased by private-equity firm Gilvest. And Time Inc.
pursued its stated interest in building out its digital assets by
buying its way into Sports Technologies' social networking and news
aggregation platform. Meanwhile, Primedia and Questex continued what
will be a common M&A refrain in the coming year, acquiring Web
sites and events respectively.
||Seller||Sale Price||Revenue Multiple|
| Sports Illustrated
||FanNation.com||$20 mill. ets.|| 1X|
The deal behind the deal: Time Inc., fast on the heals of CEO Anne Moore's public comments that the company would be pursing an aggressive Internet strategy, bought FanNation.com, a 10-month old sports content site, for its Sports Illustrated Group. Along with the sale, Time Inc. purchased a minority stake in the site's parent company, Sports Technologies. The deal grants Time Inc. instant access to â€˜Web 2.0' technology and know-how-namely, user customization, community and contributed content. The technology will first be incorporated into the SI Group and then across other Time Inc. online properties.
Our panel says: "It's the technology. And the focus of SI is very much directed at the Web site. It's been the most successful thing at Time Inc. They're getting a free pass right now to keep building it up."
"That one was all about the technology. Time Inc. bought into Sports Technologies' social networking technology. Plus, with FanNation.com, they get a site that's already been built."
|Buyer||Seller||Sale Price||Revenue Multiple|
|| $10 million est.
The deal behind the deal:
Even as the company was preparing to announce it was exploring a sale
of its enthusiast group, Primedia acquired Rentalhouses.com. The Web
site, the second-largest online listing of small-unit rental
properties, will be positioned in the company's Consumer Guides
division and integrated with its other apartment listings at
HomeRentalAds.com, RentClicks.com and AprtmentGuide.com-all within the
to the statement announcing the deal, Rentals.com will carry about 62
percent of all paid small-unit rental listings on the Internet.
Our panel says: "That deal just builds up their operation in Atlanta. That's the part of the company [Primedia is] going to keep. They've been making a series of those acquisitions over the last couple of years."
"That deal gives them much greater market coverage. That side of the business is a high-margin operation. If they end up selling off the enthusiast division, this will be all that's left."
|Buyer||Seller||Sale Price||Revenue Multiple|
|| McLean Events International
The deal behind the deal: Questex purchased British company McLean Events, an 11-year-old producer of 13 branded, appointment-based events in the hospitality, spa, conference incentive and health and recreation markets.
McLean's events are modeled on a heavily networked, appointment format. Meetings between attendees and sponsors are prescheduled and one-on-one between suppliers, manufacturers and business owners and operators.
Our panel says: "I think they've taken their time to bed things down and only make small acquisitions. I think they'll start to become more acquisitive in the year to come."
CEO Kerry] Gumas has a very strong background in the events business.
It's a natural fit for Questex, and a very hot area at the moment."
|Buyer||Seller|| Sale Price
|| Revenue Multiple |
| Gilvest LP
|| $20 mill. est.
The deal behind the deal: Digital magazine publisher and distributor Zinio Systems was purchased by private equity firm Gilvest LP, led by David Gilmour.
Gilmour founded FIJI Water, sold it in 2004, and has a background in hotels and gold mining. Most recently, he founded VIV Publishing, which publishes the all-digital VIV Magazine, a women's lifestyle publication.
Under terms of the deal, Zinio's management team will remain in place and continue to be led by president Richard Maggiotto. Zinio's previous venture capital backers include New Enterprise Associates, North Bridge Venture Partners, Intel Capital, Odyssey Capital, Parker Price Venture Capital, and Palisades Ventures.
Our panel says: "They raised a lot of money several times from some high-flying venture capital firms and they brought in a succession of expensive CEOs to turn it into a big deal and sell it. Eventually they gave up."
"Rich [Maggiotto] is president now, and probably should have been president a long time ago. It's a resetting of expectations."Buying? Selling? Know someone who is? Submit M&A related tips and news to senior editor Bill Mickey at email@example.com.
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