Jeffrey Stevenson graduated from Rutgers University in 1982 and went to work in mergers and acquisitions for media merchant bank Veronis Suhler, as it was known then. Five years later, he started Veronis Suhler’s first private equity fund, for which he and the bank raised $57 million.
Almost two decades after that, Stevenson is overseeing the bank’s fourth fund, which is just getting under way and has a $1 billion war chest. His value to the firm can be seen in the name on the door; in 2001, the bank became Veronis Suhler Stevenson.
Stevenson and the firm were among the vanguard in private equity investing in b-to-b media. Since then, private equity has come to dominate M&A activity in the sector.
VSS’ first two funds generated a strong internal rate of return of 46% each. The third fund, which was launched in 1999, is still active, but recent sales by VSS of construction industry media company Hanley Wood and medical industry media company Canon Communications are encouraging signs for that fund’s internal rate of return as well.
Hanley Wood sold for about $650 million. Stevenson said the company quadrupled its EBITDA during the six years VSS owned it.
Canon Communications sold for $200 million. Stevenson said the company boosted its EBITDA between four and five times in the nine years VSS owned it.
Stevenson said the two companies epitomize what VSS looks for in an acquisition target for one of its funds. Speaking specifically of Canon, he said, "We liked the combination of the magazines and the shows for starters. We think that’s the right place to be in b-to-b, and it is also a good platform from which you can build out to other forms of media, whether it’s online, or newsletters or rich data."
Hanley Wood offered similar characteristics. Both companies also have strong management teams and hold commanding positions in the fragmented markets that they serve.
Mike Wood, the co-founder of Hanley Wood, is a fan of Stevenson, VSS and private equity investment in general. "The people I’ve worked with in private equity are smarter, sharper, think faster, make decisions more promptly and know how to improve value," he said.
VSS continues to be active in b-to-b media investments. Its funds currently own 40% of b-to-b media company Ascend Media and 100% of Access Intelligence. Through its mezzanine fund, VSS also owns a stake in Schofield Media.
Stevenson said VSS has other b-to-b media companies under consideration for its fourth fund, especially with managing directors such as Tom Kemp and Hal Greenberg on board focusing on b-to-b media.
"B-to-b is definitely a target," Stevenson said.