Summit Business Media
Summit Business Media
Buyer: Summit Business MediaSeller: Pfingsten and HighlinePrice: $100 million, and $90 million. Date: NovemberTakeaway: Former F+W chairman and Primedia founder makes a big splash in b-to-b with a double acquisition and marketshare grab in a private equity-backed operator play.
The formation of Summit Business Media by private equity backer Wind Point Partners marks the return of William Reilly, one of the original founders of Primedia and former chairman of F+W Publications. Reilly, who was hindered from the consumer market by a non-compete clause with ABRY Partners when it purchased F+W in summer 2005, popped up with a vengeance in late 2006 in the b-to-b sector with the dual acquisition of Pfingsten Publishing and Highline Media for almost $200 million combined. The deals, according to Reilly, give Summit immediate and overwhelming marketshare in the financial management and insurance industries.
Wind Point, which also backs Skip Zimbalist’s Active Interest Media, set up Reilly as chairman and CEO of Summit with $150 million committed to form a portfolio company around the purchase of Pfingsten and Highline, with a focus on the insurance, financial services and arts markets. And, according to Jim TenBroek, managing director at Wind Point, Reilly himself has "substantial" cash equity invested in the company.
TenBroek says that Summit was fortunate to get the two companies together and notes it was fortuitous having the Pfingsten deal underway when the Highline opportunity came along. "Pfingsten had [previously] derailed, it wasn’t on anyone’s radar screen, we had that under letter of intent and then the Highline process started," he adds. "Having the two businesses meant that we would have over $20 million in EBITDA and that makes a much more financable business. Highline is a good, solid business but still relatively small for the capital markets."
Reilly says that the two companies fit together with similar assets. Highline’s titles include National Underwriter, Property/Casualty, Life/Health and Wealth Manager, while Pfingsten’s assets include Life Insurance Selling, Mortgage Originator, Progressive Distributor, and MRO Today. Reilly adds that the combination of the companies gives Summit 40 to 50 percent of the marketshare in the financial management industry and about 75 percent marketshare of the insurance industry.
Revenues in 2006 for Pfingsten and Highline were between $90 million and $100 million each, and Reilly says he’d like to grow that to $500 million in the next several years. "The growth would be organic and from acquisitions," he says. "It’s not going to be a giant company, but it’s going to be a big build-up. It’s your classic affinity company."
Comments: They merged some of the back-office stuff, so that made sense. I think Pfingsten’s financial titles make perfect sense, but I don’t know how hot the art market is. It’s dominated in retail by mom-and-pop businesses. It may not be that lucrative in the long run.