This week Stagnito Business Information and Edgell Communications announced they had merged, and the newly combined entity (to be renamed in the near future) was sold to private equity firm RFE Investment Partners. The new company creates a “retail business intelligence source” for the North American grocery, convenience store and box retail market.
“Business intelligence” isn’t just a new way of saying business media—Stagnito and Edgell both bring rapidly growing research and information services businesses to the table. It's those businesses which newly named CEO Kollin Stagnito (pictured) thinks will grow to at least a third of overall revenue—and present a bigger opportunity than the combined company’s current largest revenue stream (events).
In a Q&A this morning with Connectiv, Stagnito looks at the new enterprise, including the new executive team, the current revenue mix and how the company is changing its perceived value among its customer base.
Connectiv: How did this deal come about? What’s the background?
Kollin Stagnito: It actually goes back to March of 2010 after Stagnito acquired Progressive Grocer and Convenience Store News from Nielsen Business Media. A few months after that we were looking at how we could expand the marketing reach of appropriate vendors into the grocery and convenience area, and one area that we identified was technology vendors. We attended the National Retail Foundation show in New York but what we saw when we went there is that Edgell was all over the place at the show. We were able to start working with vendors like SAP, Oracle and Verizon but we didn’t penetrate as much as we would have liked to. We realized that the only way to get deeper into that industry was to partner with Edgell or to come together.
Two years ago, that opportunity presented itself. This merger is not something that came up recently. The only reason we didn’t come together a few years ago was that at the time, Stagnito was in the process of acquiring its research division and Tesoro Business Media. We acquired the two businesses in a one-week period, so the timing wasn’t right to have a merger with an entity as big as Edgell. Since then we diversified our offerings away from just media into events and research and now the time was right to re-engage with Edgell.
Connectiv: What’s the revenue range for the newly combined organization?
Stagnito: It’s in the range of $50 million.
Connectiv: You’re taking over as CEO, Harry Stagnito is transitioning to the board of directors of the new organization, and Gerry Ryerson is retiring. Who else is part of the immediate executive team?
Stagnito: The executive leadership is primarily the leadership from the Stagnito side: Ned Bardic, the chief revenue officer who has been with the Stagnito management team since 1997; Korry Stagnito as chief brand officer; and Kyle Stagnito as CFO. From the Edgell side, Dave Weinand is vice president and general manager, and he will primarily be responsible for the tech brands that came from the Edgell side.
Connectiv: What’s the product mix going forward?
Stagnito: What’s great about both these companies is that neither one has just rested on print and digital being our solution. We’ve both been moving down parallel tracks in that we want to diversify and become business information companies rather than traditional media companies. Both companies in the last few years have grown the research portion of their offering but we did it in different ways—Edgell created a division from scratch through the Executive Knowledge Network (EKN) which specializes in retailer research, whereas Stagnito acquired Partnerview and focused on consumer research.
Consider the fact that we have digital, events and research, we can work with a tech company all the way from the very beginning of a product life cycle, from what it should look like to price point to how it will work for them, through product development, marketing, and distribution. We are no longer just a media company; we are no longer marketing. We are an intelligence company. CPG brands come to us to solve an issue—not just to help them get the message out, but help them decide what the message is, and let them know what the consumers and what the retailers feel about this solution. That research and information part of our business is 15% of our overall revenue and our desire is for that to grow to be bigger part of total solution we offer customers.
Connectiv: What is the revenue ratio of the combined company?
Stagnito: The general ratio currently shows print at 39% of our overall revenue, digital 20%, events 25%, and research about 15%. As opposed to some other media companies, the percentage of print has declined not because revenue was going backwards (it’s been growing year over year for the last five years), but because we’ve diversified and grown event revenue in particular. Events have been the backbone of the portfolios for both companies for the last three years.
Events will still be a big focus for us going forward, but we think the biggest opportunity by far is in the area of research and information services. I would like to see that be a third of our business. The value that we bring to customers is completely transformed by our research and information capabilities. It’s helpful to our research customers and to our general audience because much of this research finds its way into our brands and is presented at our events.
[Private equity firm] Topspin Partners worked with us, and they’ve allowed us to have four acquisitions in the last three years and transform from a media company to a business information company. It’s been a great partnership.