Amelia Island, Fla.—A pair of media investment bankers who spoke at this week's American Business Media Annual Conference here see good times ahead for b-to-b media M&A activity.
“The business models have been validated, and lots and lots of deals will happen,” Dan McCarthy, partner at DeSilva+Phillips, said in a session titled, “The B-to-B Company of the Future: A Fully Integrated Enterprise?” “We're moving into an incredibly robust period.”
In a separate session, John Wickersham, partner at Atwood Capital Partners, said the industry is “definitely at a crossroads.” He cited as evidence the ABM's merger with the Software & Information Industry Association, which the ABM membership overwhelmingly approved Monday.
Wickersham presented findings from research Atwood conducted with ABM that showed the following revenue breakdown for b-to-b media companies in 2012: print, 42%; events, 28%, digital, 25%; and other, 5%. He said industry growth rates of around 2% and shrinking margins are not going to attract capital to the market, and he noted, “There are virtually no private equity players at this meeting.”
What could change that outlook, he said, is media companies' move into advanced offerings such as database intelligence, lead generation, community development, proprietary data and mobile distribution.
“The private equity players will be back before five years because there will be a lot of innovation in this group,” Wickersham told his audience.