Northstar Travel On the Block

Northstar Travel Media, the private equity-backed publisher of some of the industry’s best known travel-related brands, is up for sale and gauging interest from prospective buyers, several sources confirmed this week.

The company, which owns Travel Weekly, Business Travel News, Meetings & Conventions and Meeting News, among others, is among the first of what is expected to be a number of b-to-b media companies on the block this year and next. Northstar is owned by Boston Ventures and based in Secaucus, New Jersey.

After four years or more of bankruptcies, takeovers and distressed transactions with only a handful of successful deals, Northstar is a bellwether. If Boston Ventures successfully divests Northstar, it will be a clear signal to industry executives, bankers and financial investors that the market for traditional—but transformed—media companies has returned.

“If it’s successful in its transaction, it will set a new standard in terms of normalized trading multiples,” said one industry observer. “There are no reliable trading multiples out there in the last three years.”

By any standard, Northstar appears to be a transformed b-to-b media company. It has revenue estimated at around $55 million, and has diversified significantly away from a reliance on print advertising. Today, one source told Folio: Alert, the company’s revenue is nearly 20 percent digital media and 20 percent live events.

The key, various executives have told Folio: over the last few years, is to be able to demonstrate rapid growth in digital and live-event media, with a footprint in subscription information and marketing services as well. Companies that once relied on print media need to have changed, or they won’t attract buyers.

And that leads to the other unknown in 2012. Who are the buyers? Private equity drove much of the M&A activity over the last 15 years. And when it came to strategic buyers, it used to be that you could count on a robust number of acquirers, such as Reed, VNU, UBM and others.

Now, only UBM is still around among those three.

Add to that the fact that many companies acquired in the last round of high-priced deals are now distressed or worse, and buyers naturally are reluctant. Any number of companies acquired in 2005 and 2006 remain overleveraged and troubled. This affects the thinking of not just the private-equity firms, but also the lenders, and the debt component of any transaction directly affects the multiple.

An emerging new source of buyers, one source told Folio:, might be strategic information-services operators interested in a specific vertical. For example, Bloomberg theoretically would have an interest in looking at a company like Source Media, the source said.

“Frankly", said one executive, “A lot of owners of b-to-b assets are looking at Northstar to see if they can lead the way in getting back from being a distressed sector to one that people are willing to invest in again.”

Northstar CEO Tom Kemp provided Folio: with a statement: “I think that visionary b-to-b information companies are turning the corner in terms of the success of new business models and diversifying their businesses, and the interesting thing will be to see if that is recognized by investors in the industry.”

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