Deal or No Deal?
Despite economic concerns highlighted by a slowdown in the housing market, merger and acquisition activity in the media and information industry remained steady through the first three quarters of 2006.
Magazine publishers in both the consumer and business-to-business sectors have been especially busy, according to M&A firm The Jordan Edmiston Group Inc. (JEGI), recording 37 and 28 transactions, respectively, through September of this year.
Most recently, the blockbuster acquisition of Penton Media Inc. by Prism Business Media Inc. sent waves through the industry. Earlier this year, Commonwealth Business Media was sold to United Business Media ($152 million) and Wenner Media acquired Walt Disney’s 50-percent stake in US Weekly magazine ($300 million).
For publishers looking to acquire other companies or position themselves to be bought out, Publishing Executive sought advice from several M&A advisers and a couple of prominent b-to-b publishers on maximizing the value of your next transaction.
Tips For Sellers
1.“Cut expenses first. [It’s] better to operate lean than to try to convince a buyer of potential cost-savings.
2. Critical to a successful transaction is a reputable, experienced M&A adviser. Selling a business happens once or twice in a lifetime for owners, but investment banks do it many times a year. A good advisor can find the buyer for whom the business offers the best strategic fit, and therefore may be willing to pay the highest price.
3. A good M&A adviser can also help negotiate the nonfinancial terms that can be important to the seller: disposition of employees post-sale, an ongoing role in the business, noncompetes, earn-outs—all of these are considerations that can impact the seller.
4. Finally, timing of a sale can affect value. Right now, valuations are at historic highs, and M&A activity is robust—a climate that is likely to persist over the next 12 months. While quality companies will always attract a buyer, the cyclical nature of the M&A market suggests that such a favorable M&A environment will not last forever.”
—Joe Berkery, president, Berkery, Noyes & Co.