In the Stagnito-Edgell Deal, a Reflection of 20 Years of B2B History
Private equity and B2B media have long been dance partners.
The merger of Edgell Communications and Stagnito Business Information and the sale of the combined company to the private-equity firm RFE Investment Partners ties together a lot of the elements of B2B media in the last 20 years. It’s worth reflecting on the forces that produced so much change during that time, and the outcome to this point.
Both companies have roots in an old model of B2B media: the individual entrepreneur with the big personality who starts his or her own company. Edgell Communications, based in Randolph, New Jersey, was founded by Douglas Edgell and his wife Gabriele in the mid eighties. Edgell (who died in 1998) was himself the son of a B2B pioneer, Robert Edgell. The elder Edgell founded Edgell Communications—a separate company from the current one—in 1987 following the $334 million leveraged buyout of the media and trade show assets of Harcourt Brace Jovanovich (HBJ) that he engineered.
Stagnito Business Information tracks its ancestry back to 1990, when Harry Stagnito, already a veteran of B2B media, founded Stagnito Publishing. After Stagnito sold it in 1997, the company changed hands several times before a variation of it found its way back to its original founder in 2010.
In the eighties and nineties, B2B media was dominated by the individual-owner types—the Stagnitos, and Edgells, the Friedmans, the Crains, the Marsh Freemans, and the Tom Phillips’s—people with their last names on the company sign. Meetings of the American Business Press (predecessor of American Business Media, which was the predecessor of Connectiv) were dominated by these people, playing golf, schmoozing each other in tuxedos, and smoking cigars as retainers and senior managers hovered around.
But then, the private-equity wave had begun. It started with the acquisition of BPI Communications by Boston Ventures in 1991, but the 1994 sale of Ziff-Davis to Forstmann Little for $1.4 billion was when private equity really got a sense of the value of B2B media.
A lot of observers say that PE ownership nearly destroyed B2B media because of its focus on short-term performance and quick flips. There’s no doubt the intervening 20 years or so created many spectacular flameouts, wiped out hundreds of millions of dollars in value, and destroyed more careers than seems typical in a capitalist economy. Not to mention the impact on served markets as budgets tightened and companies changed hands frequently.
But then, it’s also true that most traditional B2B media companies today are owned by private-equity firms. And most that survive have made a strong transition into new services for their markets and weaned themselves off of print.
So even through Stagnito has been working with PE for years, in some ways it completes the circle that two companies with deep roots in old-school B2B are merging and now owned by PE. Let’s see what the next chapter brings.