M&A Scorecard: October 2005
By Bill Mickey
Sale Price: $27, $24, $5.5 million
EBITDA Multiple: 10X, 10X, 7X
The deal behind the deal: In mid-August United Business Media’s CMP Media announced the acquisition of three companies , two of which specifically bolster online assets. Telecommunications media company Light Reading, chemical trade show Informex, and electronic engineering portal site TechOnline were purchased for a total of $56.5 million;$27 million, $24 million and $5.5 million respectively. CMP CEO Gary Marshall has said that Light Reading and TechOnline will extend the company’s online presence;a move that reinforces a recent trend among media companies expanding their online portfolios to capture the surge in online ad spending.
Our panel says: “You only pay high multiples for things that you believe are going to be productive.”
Buyer: Apprise Media
Sale Price: $10 million est.
Revenue Multiple: N/A
The deal behind the deal: Charles McCurdy’s Apprise Media expanded its enthusiast group with the acquisition of Orange, California-based Y-Visionary LP , publisher of nine magazines in the automotive aftermarket, outdoor sports and shelter markets. The assets will be placed in Apprise’s Action Pursuit Group. Apprise is backed by Spectrum Equity Investors, which has committed $200 million to the venture. Y-Visionary is McCurdy’s fourth acquisition, giving him one b-to-b and three enthusiast companies. Within his enthusiast stable, he has 25 magazines reaching a total of 1.2 million readers.
Our panel says: “It’s hard to find stuff with any scale on the enthusiast side. They tend to be small because they go for a defined market. You have to put a lot of them together to get any bulk.”
“Anytime you have an enthusiast it drives down the value because they’re not in it for the money. They’re in it for the love of it. It’s one of the downsides to enthusiast.”
Buyer: Highline Media
Seller: Bloomberg L.P.
Sale Price: $10 million est.
Revenue Multiple: NA
The deal behind the deal: Andrew Goodenough, Highline’s CEO, is back on the acquisition scene with the purchase of Wealth Manager, his first of the year. The deal is aimed to strengthen Highline’s financial services offerings. The company also has products in the insurance and real estate markets. Highline is backed by Spire Capital Partners, which committed $75 million in 2003. Since starting the company, Goodenough has just about doubled revenues to $40 million;mostly through acquisition.
Our panel says: “It’s consistent with his strategy. He was opportunistic about it;that he was able to pick it off of Bloomberg.”
Buyer: Discover Media
Seller: Disney Publishing Worldwide
Sale Price: $15 million
Revenue Multiple: 1.5X est.
The deal behind the deal: Disney Publishing Worldwide signed an agreement to sell 25-year old science magazine Discover to Bob Guccione Jr.’s freshly formed Discover Media LLC for under $20 million. Disney originally announced its intention to explore a possible sale last March. Backed by a group of investors, Guccione Jr., founder of alt music magazine Spin and now-defunct lad magazine Gear, created Discover Media with the specific mandate to buy Discover and then continue with more media acquisitions.
Our panel says: “The price is considerably below what was originally sought by the sellers. Expectations were so out of line with reality that it turned out to be a busted auction price.”
Wolters Kluwer Health acquired Boucher CommunicationsﾅStamats Business Media bought three magazines, including Interiors & Sourcesﾅ Paperloop sold its Converting Machinery and Materials conference business to PennWellﾅAdvanstar bought the Project Trade Show group.
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