After several years of rampant M&A in the B2B media space, which included the $5 billion sale of UBM to Informa, the estimated $180 million sale of Questex to MidOcean and the acquisition and merger of Hanley Wood into Meyers Group (also under MidOcean), M&A has slowed considerably in 2019--and not just in B2B. The $29 billion merger of Refinitiv and London Stock Exchange notwithstanding, the number of deals across data and information services, consumer media, events and even software and technology have plummeted.
One notable exception is Endeavor Business Media, the most active strategic buyer in B2B media over the last two years, which shows no signs of slowing down. Launched in late 2017 by former SouthComm executives Chris Ferrell (pictured) and Patrick Rains, Endeavor has completed nine acquisitions to date, including the former assets of SouthComm, Grandview Media, Vendome, Forester Media and PennWell Media properties, which were purchased in February from events company Clarion, Endeavor’s most recent deal to date.
“We took a little pause after acquiring the PennWell titles because there were so many to integrate but we are now back in conversation and working on some additional transactions,” says Ferrell, who declined to say specifically what they are looking at beyond properties that will fit within Endeavor’s existing industry clusters without overlapping. “We are a media company and we are looking at properties that have media as well as events components.”
Endeavor today boasts 42 magazine brands and 46 conferences and trade shows with 380 employees across 12 different offices. A little more than 40 percent of Endeavor’s revenue comes from print advertising, followed by both digital and events contributing more than 20 percent each and the remaining eight percent spread across miscellaneous businesses including subscriptions, data products and books.
Markets served include medical, oil and gas, public services, security, construction, water, medical and more. “Today we are in six to 10 different markets depending on how you define the clusters,” says Ferrell. “The reason for the caveat is we have things like our water group that is part of the industrial cluster, depending on whether you count that as one or two. The notion was we would have diversification without being scattershot. We are trying to build out industry clusters that are not overlapping but related.”
Endeavor has pursued two primary acquisition targets: one, family-run businesses where the principal is ready to retire (such as Forester); two, assets that were acquired as part of larger transactions that the buyer didn’t want for their long-term plan (such as Clarion and PennWell’s magazines).
Rejuvenating those brands and finding ways to extend those acquisitions to new markets are part of Endeavor’s strategic plan. “The first acquisition we made for our industrial group was Grandview‘s Processing brand, which continues to diversify its revenue and is seeing 10 percent topline year-over-year growth,” says Ferrell. “We also take an acquisition in one market and apply that to another audience and make a brand-new market. We acquired a group of buyers’ conferences that are now in the process of rolling out in lot of niches where we have media properties. For example, we did an operating room event that tied into our healthcare titles such as Healthcare Purchasing News. We had great success launching that event in January and getting great response for those same vendors.”
Moving Forward: Balancing Revenue, Capitalizing on Data
Ferrell’s primary goal is to achieve balanced revenue between print, digital, events and even data. “I want them to be equal legs,” he says. “The future is really in growing a data business to be an equal leg of those other parts.”
Endeavor isn’t starting from scratch with data and sees an opportunity for both premium subscription data products as well as audience and advertising enhancement. Along with the acquisition of PennWell’s oil and gas titles came Envision, an online mapping and data platform that Endeavor licenses to clients to provide data and map-based interfaces of pipelines and power grids.
In June, Endeavor tapped Infogroup to help expand its data business. “We gather a lot of data about our audience as they’re interacting with our websites and we’re providing not just e-mail lists but intelligent leads where we can be more predictive about people buying and selling,” says Ferrell. “I’m envious of our colleagues in the industry with data products that sit in the daily process of their market’s business. Look at Brief Media in the veterinary space. They are doing some really interesting work where they become part of the way their customers are doing businesses. We want to insert ourselves into our customer’s business practices.”
"Media" Still Has Life
While print advertising is in free-fall for many publishers (down as much as 40 percent in the first half of the year, according to MediaRadar), Ferrell remains a proponent of the viability of print as both revenue generator and a way to build audience (and audience data).
“Print is still a viable platform for reaching our audiences,” says Ferrell. “The valuation of these business has been painted with too broad a brush. I came out of consumer media where print media is being devastated. That’s not always the case in B2B media. We have brands where print is steadily declining and others where print is steady or even growing a little bit. We have data that shows people who use print for branding get better response than e-mail advertising. When it comes to the gathering of specific audience information, our print list is really valuable. We don’t just have an e-mail list; we can measure up to the actual job title. That’s information that people will give you in exchange for a print product that they are less likely to give you for an e-mail product.”
The industry is filled with examples of companies prioritizing new businesses models or abandoning media altogether (which has been the catalyst of many of Endeavor’s acquisitions), but Ferrell is convinced in the viability of B2B media. “I still think there is a lot of value in the core B2B media business,” he says. “There is a lot of data and a lot of loyal users that are assembled in those audiences that we can still provide real value to and connect advertisers to in meaningful ways.”
Chris Ferrell will be speaking at the upcoming Business Information & Media Summit on a panel called M&A Outlook 2020 that also features Stuart Poyser, group director, corporate development at Informa, Geordie Pierson, principal, Falfurrias Capital Partners, Jesse Serventi, founding partner at Renovus Capital Partners and Wilma Jordan, founder and CEO of the Jordan, Edmiston Group.