BtoB Media Business - October 2008 - (Page 16)

M&A ‘Barron’s’ makes a deal Purchase of Winner’s Circle Organization is first acquisition for 87-year-old publication M&A BY DAVID W. FREEMAN ANALYST INSIGHT Jeffrey Dearth Partner, DeSilva+Phillips W ith its acquisition last month of the Winner’s Circle Organization, Barron’s increased its stake in the lucrative business conference industry while strengthening its ties to the financial advisers who make up one of its core audiences. The purchase was the first by the Dow Jones & Co. publication in its 87-year history. It capped a five-year partnership between the New York-based business tabloid and Winner’s Circle, a Boca Raton, Fla.-based consultancy that provides analysis of financial advisory practices and rankings of financial advisers. Together they produced the Investment Consultants Summit, Top Advisers Summit and Top Women Advisers Summit. Under the terms of the deal announced Sept. 24, Winner’s Circle founder and former president R.J. Shook will spend the next two years as a consultant to Barron’s. Financial terms of the deal were not disclosed. Barron’s announced the acquisition nine months after Dow Jones was taken over by Rupert Murdoch’s News Corp. Given Murdoch’s reputation as a dealmaker, some industry insiders wondered if he had driven the acquisition and if similar acquisitions might be in the offing. No on both counts, said Ed Finn, Barron’s editor and president. “This acquisition arose very much from Barron’s,” he said. “It was a natural evolution of our business, and News Corp. and Rupert saw the fit with Barron’s and were supportive. We don’t plan any more acquisitions.” The acquisition exemplifies a trend toward smaller deals in the business media sector. “We’re still seeing lots of deals getting done, but they’re mostly small ones,” said Reed Phillips, managing partner at DeSilva+Phillips, the media investment bank that represented Winner’s Circle in the deal. “A lot of the buyers had been private equity firms, and they can’t borrow as much now as they were able to a year ago.” As a result, he said, media companies are outmaneuvering private equity firms. Michael E. Parker, managing director of media investment bank Ad Media Partners, said the deal made good business sense for Barron’s. “All the business publications we observe or do business with are looking for additional revenue streams,” he said. “One of those streams is obviously online, and Barron’s appears to be in good shape there. Another that has proven successful is events and awards shows.” Barron’s plans to add more conferences, Finn said, including one for independent financial advisers next May and another in 2010 for lawyers and accountants who work closely with financial advisers. He said there is no plan to drop the Winner’s Circle moniker. In addition to the conferences, Barron’s plans to launch a subscription-based Web site for financial advisers in November. It will feature five-minute videos adapted from presentations made at the conferences. Finn said he was confident that Barron’s expanding conference business would succeed despite the current financial crisis. “It’s not going to take over our business, but it’s a nice sideline,” he said. And if the economy goes into a severe decline? “That’s going to make Americans want more advisers and more financial information,” Finn added. Making deals in tough times L arger deals are having a much more difficult time moving forward than smaller ones these days due to the problems in the credit markets and the unpredictable state of the U.S. financial industry in general, according to Jeffrey Dearth, a partner at media investment bank TIPS DeSilva+Phillips. Don’t: Sellers “Buying ‘levershouldn’t miss age’ is down, and any forecasts. buyers are forced to Declining numwrite larger equity bers and missed forecasts are checks than they the primary reanormally would,” he sons deals fail to said. get done. Because of that, Do: Sellers buyers are far more should continue to invest in cautious, and due growth initiadiligence is even tives and show more stringent than that they both understand it was only a few their market months ago. This, in and can change quickly to meet turn, has added to the vicissitudes the time it takes to of the current put together deals, economic cycle. Dearth said. “Time can be an enemy in an uncertain economic environment,” he said. Dearth said sellers need to link up with buyers that are motivated and not just kicking tires. “Sellers need to show adaptability in the face of change and to demonstrate that they are adept at reading their particular markets, managing costs and positioning themselves for continued growth,” Dearth said. To convey the seriousness of their interest, buyers should “put a short fuse on the transaction, demonstrate a willingness to move quickly on due diligence and perhaps volunteer to mark up an asset purchase agreement at the time of the signing of a letter of intent,” he said. — M.J.M. A roundup of recent mergers and acquisitions M&A ACTION Date Property Description 9/8 UpToDate Electronic clinical information resource for physicians, clinicians, patients and medical centers 8/8 Pyramid Provider of subscription market informaResearch tion for global telecommunications industry 8/8 Harris Provider of integrated data research and Connect Internet solutions for educational institutions and organizations Source: Jordan, Edmiston Group Transaction Database, 2008 Seller Buyer KarpReilly Wolters Kluwer Executive United Insight Business Media Harris Wicks Connect Group of Cos. 16 | Media Business | October 2008 | mediabusinessonline.com http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - October 2008

BtoB Media Business - October 2008
Contents
Upfront
Cover Story
Webinars
Sales & Marketing
M&A
Online
Events
Circulation
People
Benchmarks
Endnote

BtoB Media Business - October 2008