FOLIO:'s Top Deals of 2007.
BUYER(S): BNP Media (17-title Professional Services Division, including Stagnito Communications); AEGIS Communications (four-title Dental Group); Red 7 Media (EXPO)
PRICE: Professional Services ($30 million est.); EXPO ($N/A); Dental Group ($N/A)
DATE(S): August 31 (Professional Services); November 11 (EXPO); December 31, 2008 (Dental Group)
TAKEAWAY: Ascend Media's implosion, driven by the sale of two divisions, the shuttering of three titles and the likely divestment of the rest of its healthcare division, led to the sacking of its CEO and founder Cam Bishop-and to a cautionary tale for private equity-backed publishers everywhere.
It was a year of dramatic restructuring-and divesting-at Ascend Media, the Overland, Kansas-based publisher that saw its stature-and revenues-skyrocket when it bought Medical World Communications for $130 million in 2004.
Then, the company had expected revenues to be around $150 million. This year, though, medical media- hit hard by a drought in new drugs not hitting the market-has taken a pounding. In August, the company completed the sale of its 17-title Professional Services, a division representing about 25 percent of the company's revenue, to BNP Media. Then-CEO Cam Bishop said it no longer fit with Ascend's strategic direction. "We are divesting our nonmedical and non-healthcare assets to focus exclusively on medical and healthcare," he said. In November, the four-title dental group was put on the block. Dental Product Shopper was sold to founder and publisher David Branch, while the remaining four (Compendium of Continuing Education in Dentistry, Contemporary Aesthetics, Contemporary Dental Assisting, and Contemporary Oral Hygiene) went to AEGIS Communications. In December, it closed three of its medical journals Physician's Money Digest, Family Practice Recertification and Internal Medicine World-with the likely divestment of the rest of its healthcare group coming in early 2008.
"There is always this media assumption that buying is good and selling is bad," Bishop told FOLIO: at the time. "Sometimes it's neither and sometimes it's the opposite. Companies shift portfolios to maximize strategic alignment, opportunity and gain-the big picture for Ascend is no different than any other private equity-backed media business." In December, Bishop, Ascend's founder and CEO, was ousted by Ascend's private equity backers. Vicki Masseria, a former group president at CMP Medica, replaced him.
"When you're doing well, private equity loves you," one executive told FOLIO: at the time of Bishop's departure. "When things aren't going well, they hate you."
When the dust settles in Overland Park, Ascend will be left with the 14-magazine allied Healthcare division, a Practice Builders consulting business, a continuing medical education business and a custom communications unit-and $70 million in revenue.
COMMENTS: "It was very poor due diligence in understanding what they bought [in Medical World] ... they had a Waterloo experience with the Medical World deal, and they could never quite dig themselves out of it."