1105 Media, the company that acquired 101communications last week, yesterday acquired Dallas-based Stevens Publishing, a seven-title publisher specializing in the health and safety markets.
The sale price was not disclosed, but a knowledgable M&A source said it was about $30 million for a company whose revenue is about $20 million.
"We are delighted to launch 1105 Media with the acquisition of two strong and diversified media franchises," CEO Neal Vitale said in a statement. "Stevens is a leader in important and growing industrial, municipal, and retail markets. Together, Stevens and 101 accomplish a major first step in building 1105 into a broad provider of integrated business-to-business information and media."
The Stevens magazines include Environmental Protection, Occupational Health & Safety, Security Products, Home Health Products, Water & Wastewater Products and Mobility Management.
Vitale did not return calls to his cell phone or e-mail messages, so it was not clear at presstime whether he plans to move all or parts of the Stevens operation to his Chatsworth, California, offices, or replace the management team. It’s likely that Stevens will remain in Dallas, though, considering that the new company’s biography states that it has Dallas offices.
With the acquisition, 1105 Media now has revenue of about $75 million and about 250 employees. New York-based media bankers DeSilva & Phillips represented Stevens in the transaction.
Meanwhile, the sale of 101communications by Chicago-based private-equity firm Frontenac Co., stands in contrast to some of the highly successful transactions in the last year or so, such as the sale of Hanley Wood last year from Veronis Suhler Stevenson to J.P. Morgan Capital partners for $650 million. VSS acquired the company in 1999 for $260 million. Frontenac vice president Andrew Seger would not confirm the amount of money invested in building 101 communications from 1998 to 2000, but said it was significantly less than the $67 million Folio: reported in March 2000. At that point, according to the Folio: report, then-CEO Kurt Hessler said 101 had spent between $50 million and $100 million on acquisitions, and planned to build the company to $100 million to $200 million in revenue. Interestingly, 101’s 1999 revenue was $54 million, about the same as in 2005.
So while the sale represents the successful turnaround and divestment of a once deeply distressed company, it was not a bonanza for investors. "The way that we would characterize the investment is that we think it was a very successful investment in every way," Seger said. "We give a ton of credit to [former CEO Jeff Klein] and his management team. We would love to find a way to work with him in the future."
Frontenac also owns Aspire Media, the consumer-enthusiast media magazine company headed by Clay Hall.