The Wicks Group
The Wicks Group
Buyer: The Wicks GroupSeller: Vibe Ventures and CMP Technology. Price: $140 million, and $47 million. Date: July and September. Takeaway: Wicks makes two consumer-facing acquisitions that expand its media holdings beyond its medical and business information units.
In the second half of 2006, The Wicks Group, a New York-based private equity firm, expanded beyond its business and medical information by buying some consumer assets. The deals don’t necessarily suggest a change in focus for the firm but nevertheless bolster its consumer holdings in a way that mirrors the business side in aggressive moves toward multiplatform business models.
In July, Wicks picked up the Vibe Ventures brands, which target the urban lifestyle and music market. Included in the sale was the 850,000-circulation cornerstone brand Vibe; an offshoot targeting trendy urban women called Vibe Vixen; and a number of brand extensions in TV, film, wireless and the magazines’ accompanying Web sites. Terms of the deal were not disclosed, but sources peg the sale price around $140 million.
PIB revenues for Vibe remained stable in 2006 over 2005 at about $112 million, with pages slightly down by 3 percent to 1,200. What did Wicks see that others didn’t? "Vibe is a book that has been looking for a new home for some time," says Jamie Weston, partner, The Wicks Group. "We have always admired the connection of the brand to its audience. I think that over the last few years it had lost a bit of its editorial focus and edge and consequently, its performance suffered. I believe that part of the reason that the assets didn’t trade for so long was that there were outsized price expectations in relation to advertising trends, and partially because the existing management team was attempting to buy the assets themselves."
Weston adds that Wicks had considered Vibe in the fall of 2005 and decided to pass. But, as Vibe remained on the block, it took another look and brought along Eric Gertler, former president of U.S. News and World Report, as a potential CEO for Vibe. "He came to us with what we thought was a viable plan to turn the business around," says Weston. "It involved an overhaul of various functions and a shift from selling display pages to selling an integrated media package."
In September, Wicks continued its pursuit of the consumer market by purchasing a mix of consumer enthusiast and b-to-b assets from CMP Technology. It bought a total of 14 magazines, some of which came from CMP’s Entertainment Media Group. Titles included Guitar Player, Bass Player and Keyboard. Also included in the sale were eight events, a number of newsletters and supplements, custom products and 20 online properties. The print properties accounted for 85 percent of the $41 million in 2005 revenues.
As further evidence of its consumer ambitions, Wicks formed an affiliate called NewBay Media to accommodate the CMP assets. Past the heavy lifting of building a management team for NewBay and recreating central services such as finance, circulation and production that used to be provided by CMP, NewBay can focus its strategies on growth. "2007 should be a year where we focus on growth through the building of integrated packages and trying to provide solutions to our customers’ marketing needs," says Weston.
Comments: They paid a good price for [Vibe] and now they’re going to build it. They’re buying into a market. They can expand the brand by doing ancillary products. I think [the CMP assets] are a great move. It’s a classic example of buying controlling interest in a major enthusiast market.