BtoB Media Business - October 2009 - (Page 17)

M&A UBM makes big push Company pulls trigger on four deals in aggressive bid to reshape business model BY MATTHEW SCHWARTZ ANALYST INSIGHT Mike Klingensmith Managing director, AdMedia Partners fter sitting on the sidelines for the first half of the year, United Business Media CEO David Levin has moved quickly on his plan to reshape UBM by investing in face-to-face events and data businesses while shuttering print products. Since the start of the third quarter, UBM has announced four deals: ■ On July 3, it purchased the remaining 48% of the holding company of RISI from its joint venture partner, Pegasus Partners II, for $14.3 million. RISI is a media and information company that serves the paper and forest products industry. ■ On the same day, UBM acquired Iasist, from Inflexion Private Equity, for $10.1 million. UBM bought Iasist, which provides benchmarking data and software to health service providers, on behalf of its CMPMedica subsidiary. ■ In late July, UBM acquired Fuel Team (on behalf of its PR Newswire subsidiary) for $2.5 million. Fuel Team hosts microsites for communications professionals working at businesses and not-for-profit organizations. ■ In late August, UBM acquired a 70% interest in the China International Optoelectronic Expo, the world’s largest optoelectronics event, from Business Media China, for $5 million. UBM shuttered 15 print titles and eliminated 350 jobs in the first half of the year, and it has stated that in light of industrywide trends, it likely will close other print properties in its portfolio, which now counts 120 magazines. “Our strategy is unchanged: We like to buy exhibits, data, online, and China, Brazil and India,” said Levin, who has since taking the helm of UBM in 2005 made 65 acquisitions for a combined $1.2 billion. He also has sold more than $1.3 billion in assets. Asked about the recent dealmaking, Levin said: “Expectations have changed and the stock market is feeling very buoyant; and, out there in the real economy, there’s significant pressure for people who actually want to sell.” Richard Mead, managing director of media investment bank Jordan, Edmiston Group, said Levin is following a similar M&A model as that of Thomson Reuters, combining large acquisitions, bolt-on deals and divestures of noncore assets. “He hasn’t rushed into the market and has been very disciplined,” Mead said. “He values the underlying communities of the brands he is buying and wants to connect those brands to other b-to-b products in the UBM portfolio.” Levin has pursued an aggressive M&A strategy despite the ongoing distress in advertising markets and a still-slumping economy. In the first half, UBM’s revenue declined to $696 million, from $730 million in the year-earlier period. M&A market starting to show signs of life A lthough there are signs of a thaw in media M&A activity, most media companies are not expected to make any major deals before year’s end, according to Mike Klingensmith, managing director of media banker AdMedia TIPS Partners. DO: Buyers “There’s been a should look for necessity [among media opportunistic situations now companies] to redo their capital structures. Every- because prices are right—but body has been trying to it’s a bit like finding a needle put the fires out; so the in a haystack. focus has not been on DON’T: Sellers M&A, except in distressed should not assituations,” said Klingen- sume the media business is smith, who spent 31 going to be ailyears at Time Inc., most ing forever. recently as exec VP, Eventually, before joining AdMedia companies are Partners in April 2008 as going to have to get back in senior adviser. “But I the business of think it’s a real thaw.” marketing their Klingensmith pointed products. to Adobe Systems’ pending acquisition of Web analytics company Omniture for $1.8 billion and the bidding for Travel Channel (which could fetch up to $1 billion) as examples of how the media M&A marketplace is starting to pick up. He said that as the economy starts to recover, traditional media players with heavy exposure to print properties will continue to “become more digital” via acquisitions. “That would be something I definitely see toward the end of this year and on into next year,” he said. Klingensmith added that marketing services and online media properties remain the most attractive media assets to potential suitors. “Multiplatform companies that are principally print-driven are going to have to show more tangible evidence of an uptick in advertising before those [types of] deals hap—M.S. pen,” he said. M&A A roundup of recent mergers and acquisitions M&A ACTION Date Property 9/09 Breaking views.com Description Seller Subscription infor- Breaking mation service for views.com financial industry professionals Buyer Thomson Reuters 8/09 Congression- Provider of news Times al Quarterly and analysis on Publishing politics and public Co. policy 8/09 Stormwater Research Group Provider of flood compliance solutions Stormwater Research Group Roll Call (Economist Group) Wolters Kluwer Source: Jordan, Edmiston Group Transaction Database, 2009 mediabusinessonline.com | October 2009 | Media Business | 17 http://www.breakingviews.com http://www.breakingviews.com http://www.mediabusinessonline.com

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

BtoB Media Business - October 2009
Contents
Q&A with New Cygnus CEO John French
Marketers Want More Online, More Leads
Resilient Revenue
Paper Makers Face Serious Challenges
Sales & Marketing
UBM's Big M&A Push
M&A
Events Audience
Development
People
Benchmarks
Four Strategies to Reinvent Print Media

BtoB Media Business - October 2009