BtoB Media Business - June 2009 - (Page 15)

M&A Major printer deal debated Some concerned R.R. Donnelley’s acquisition of Quebecor could threaten competition tional Law Journal, was blunter. R.R. Donnelley’s unsolicited offer last “It’s scary if you take one major player out month to buy its bankrupt rival Quebecor and are left with one major player,” he said. World for $1.35 billion met with mixed reac- “I don’t think this would be a good deal for btion from b-to-b publishers. to-b media companies because it removes Although some publishing executives said competition.” an acquisition by Donnelley would help shore Incisive signed a three-year deal with Queup Quebecor’s customer base, others expressed becor last summer. Since Quebecor filed for concern that such a merger would be anti-com- bankruptcy in January, there has been no petitive. Donnelley has more than 150 printing change in quality or delivery, Filippone said. plants worldwide; Quebecor has about 90. If Donnelley buys Quebecor, Filippone Neither Donnelley nor Quebecor World added, it could prove limiting for business pubwould discuss the potential lishers, “There could be condeal beyond their initial statesolidation, and Donnelley ments regarding the offer. could combine some plants,” Quebecor, which filed for he said. bankruptcy protection in Other publishers said that January, announced last if the merger were followed month that it had reached an by rate increases, publishers agreement with its creditors Glenn R. Filippone, VP-production at could take their business Incisive Media that would allow it to emerge elsewhere. from bankruptcy as early as mid-July. Mean“There are a lot of second-tier players who while, the company has taken steps to reduce we could go to without losing quality or priccosts, including a 10% across-the-board salary ing power,” said Rick Maurer, director of procut announced in April. duction at Briefings Media Group, a small “Clients who have been worried about publisher whose titles include American Quebecor’s financial situation are now re- Painting Contractor and FacilityCare. lieved because the business will have better Ned Borowsky, president-CEO of North support [from Donnelley],” said a printing in- American Publishing, regularly meets with dustry analyst who requested anonymity. major printers and in May hosted Quebecor “On the other hand, there’s a lot of concern executives to get a sense of their services. “We that Donnelley is going to become so huge, discovered that [Quebecor] offers a range of and it could get suspect by taking so much services outside of our [R.R. Donnelley] conbandwidth of print publications.” tract that we found to be of interest,” he said. Glenn R. Filippone, VP-production at Inci- “My sense after the meeting was that Quesive Media, whose products include Accoun- becor has a bright future once it emerges from tancy Age, Law Technology News and The Na- Chapter 11.” BY MATTHEW SCHWARTZ ANALYST INSIGHT Baran Rosen President, Whitestone Communications “I don’t think this would be a good deal for b-to-b media companies.” A roundup of recent mergers and acquisitions M&A ACTION Date Property 5/9 California Gift Show 4/9 WorldTrade Executive Description Gift market trade show Newsletters and special reports on international markets Imaging Technol- Medical trade ogy News, Diag- magazines nostic & Invasive Cardiology Seller dmg world media WorldTrade Executive Buyer Merchandise Mart Properties Thomson Reuters 4/9 Reilly Scranton Gillette Communications Communications Group aran Rosen, president of media investment bank Whitestone Communications, compares the current condition of the media M&A market to a hospital patient. “He is out of the intensive care unit and is walking around a bit, but is still hooked up to the IV bag,” Rosen said. “The pain appears TIPS to be subsiding.” DO: Sellers need Rosen said he to build up data/subscriphas started to see interest pick up sig- tion businesses and/or social nificantly among networking media buyers look- sources of reving to make a deal. enue to enhance valuations. “The contagion DON’T: Compafrom the stock mar- nies shouldn’t ket has given buysell if they have had weakened ers a new confifinancial results dence,” he said. this year and “They’re interested can afford to wait until their in Internet/data/ business is back content-driven on an upward businesses and track. less so in print.” The downside, Rosen said, is that companies remain skittish about selling during the recession and not getting the price they might command once the economy recovers. “There’s a lag time going on,” Rosen said. “Sellers need to have better P&Ls to show buyers multiples that will yield a valuation that works for the seller.” Another obstacle is the lack of credit, which is particularly problematic for private equity players with a stake in b-to-b media. “The market is still waiting for lending to kick in,” Rosen said. “The private equity companies are still strapped for bank lending for deals, and, until [credit] improves, things will be tempered. When lending comes back, that’ll open —M.S. the floodgates.” ‘Lag time’ between buyers and sellers B M&A Source: Jordan, Edmiston Group Transaction Database, 2009 mediabusinessonline.com | June 2009 | Media Business | 15 http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - June 2009

BtoB Media Business - June 2009
Contens
Publishers Reassess Google AdSense Programs
Amid Cutbacks, Media Firms Are Still Investing
Open-source CMS Advantages Outweigh Problems
Sales & Marketing
M&A
Online
Production
Events
Circulation
People
Benchmarks
The End of B-to-B Media As We Know It?

BtoB Media Business - June 2009