BtoB Media Business - June 2012 - (Page 14)

M&A New b-to-b media player North Coast Media formed following spinoff of Questex Media’s industrial and specialty group M&A ANALYST INSIGHT Roland DeSilva Managing partner, DeSilva & Phillips different. So we’re not putting all of our eggs into orth Coast Media launched in early May one basket,” he said. “We’re looking at growth after Kevin Stoltman, VP of Questex both organically and through acquisition.” Media Group’s industrial and specialty Kerry Gumas, president-CEO of Questex, said group, acquired the unit for an undisclosed price. the proceeds from the sale will go toward exStoltman is president of the new company, panding the company’s operations in its core based in Cleveland. Its brands include Golfdom, markets: hospitality; travel; beauty and leisure; GPS World, Landscape Management, LP Gas, and high-tech, telecom and life sciences. Pest Management Professional and Pit & Quarry. “We thought the management buyout and the Several of these titles were “cash cows” for establishment as a standalone media company was Questex, Stoltman said. “They’re profitable right the best solution,” Gumas said. “We were connow,” Stoltman said. “[So] what cerned about the people [in the can I do if I take more of that group] because many of these profit and reinvest it back into people have been with Questex the brands?” since day one, and we very Stoltman said there would much thought that was part of be no layoffs as a result of the the intrinsic value of those transaction. properties.” North Coast now has more Gumas said he is not actively than 30 employees, and Stoltpursuing any other divestitures man plans to expand the staff but was about to close an acquiKevin Stoltman, by 25% in the first six months sition. (He did not elaborate.) President, North Coast Media of operation. He said he’s meMike Parker, managing didia-agnostic when it comes to growing the port- rector of AdMedia Partners, said Questex’s sale folio and that he will invest in the company’s dig- of the assets that now comprise North Coast Meital, mobile and print platforms. dia reflects the ongoing trend among b-to-b me“These markets are going to dictate what dia companies to focus on their core strengths they’re going to dictate, and our readers still like and unload properties considered peripheral. print,” he said. “This follows the trends of where media comStoltman said he is looking at “tangential” panies must go, in some instances, in order to inmedia properties that can dovetail with some of crease their profitability,” Parker said. “When the broader markets served by North Coast, such Kerry says he’s paring back to the core, that’s as energy, mining and recycling. probably what a lot of media companies are ei“We have six primary titles that aren’t really ther doing now or thinking of doing, because it’s connected in one way or the other. They’re very going to increase their bottom line.” BY MATTHEW SCHWARTZ N Q2 to remain flat, digital up oland DeSilva is managing partner of media investment bank DeSilva & Phillips. Media Business: The aggregate value of media M&A deals fell in the first quarter, according to reports. What is the outlook for the second quarter? Roland DeSilva: It’s going to remain flat. The activity in the M&A market is taking place in the digital space more than anything else. That’s where we’ll see some reported activity. And there are some larger deals that will happen. For b-to-b media companies with a lot of print exposure, you may see one or two of those deals be reported in the second quarter. But I fully expect the second quarter not to be robust in that area. MB: How is the credit market affecting the activity for midmarket media deals? DeSilva: It’s according to what the media deal is. If you go back to print and start at the low point there, you’re getting two (times)-to-two-and-a-half-times senior debt, if it’s a valuable property and it’s in a transition to digital media. As you go up the scale and you find more digital media, your lending starts increasing for middle-market deals. You can go as high as four times-to-four-and-a-half-times senior debt. That’s what’s driving the multiples. The lower the leverage, the lower the multiple on EBITDA for properties. R “These markets are going to dictate what they’re going to dictate, and our readers still like print.” A roundup of recent mergers and acquisitions M&A ACTION Date Property 5/12 Description Seller Buyer Bobit Business Media Symphony Technology Group Newport Media company focused Newport Business Media on trucking and allied in- Business Media dustries Wolters Kluwer Provider of prescription Wolters Kluwer Healthcare usage data to the Analytics pharmaceutical industry Experient Provider of meeting and event services 5/12 4/12 Riverside Co. and Maritz VSS Communications Partners —M.S. Source: Jordan, Edmiston Group Transaction Database, 2012 14 | Media Business | June 2012 | mediabusinessonline.com http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - June 2012

BtoB Media Business - June 2012
Contents
UBM, Randall-Reilly revamp to pursue growth
Cutting-edge sites, apps reflect ongoing shift to digital
Publishers accelerate content licensing operations
Sales & Marketing
M&A
People
Production
Benchmarks
Why one media company expanded its footprint

BtoB Media Business - June 2012