You’ve Got to Know When to Fold ’Em
Home to more than 100 business-to-business magazines, Reed Business Information is the largest business publisher in the United States and a prominent player in conferences and exhibitions, directories, online media and marketing services. A division of Reed Elsevier, the company spans five continents and is a frequent participant in the mergers and acquisitions market. Tad Smith, CEO of Reed Business Information U.S., talked with Publishing Executive about his company’s M&A strategy and what kind of opportunities Reed may be eyeing down the line.
Was selling Reed Business Information’s New Products division to Advantage Business Media the most recent M&A deal your company has been involved with?
Tad Smith: If “been involved with” means closed, the answer is yes. If “been involved with” means been either in discussion with, seriously issued a non-binding letter of intent (LOI), kicking tires with due diligence, then the answer is no. We have issued two non-binding LOIs as of this very moment, and we are going through due diligence on them, and we are, I think, about to pass on another one. We’re pretty busy over here.
Can you walk us through the process of identifying a potential acquisition from your perspective?
Smith: First [you want to] understand on a thoughtful level what the business that you’re running is trying to accomplish, and then assess any gaps that you have in your current portfolio insofar as accomplishing it.
Secondly, you try to match those gaps up to attractive businesses in attractive sectors that fit with what you’re doing.
Then you put the word out on the street that you are looking for businesses that fit the type that you have. The more clear you can be in the criteria you have, such as the financial return you are expecting, the size, the growth rate and profitability, and the type of sector, the more helpful people will be in getting information to you and also surfacing ideas for you.
Related story: M&A Market Remains ‘Buoyant’