The accelerating pace of change in the marketplace is prompting b-to-b media companies with considerable print exposure to sell those assets sooner rather than later, according to Baran Rosen, president of media investment bank Whitestone Communications. “Reed Business Information is an example—and [reports about] UBM selling its print portfolio is another example—of major magazine owners heading for the hills,” Rosen said. He spoke to Media Business about the current state of the media M&A market.
Media Business: What's your outlook for media M&A activity for the remainder of the year and the start of 2013?
Baran Rosen: It looks really good. The market is just about back to where it was before the recession in terms of valuations, deal pace—and it definitely does apply to certain sectors. I'm not talking about traditional magazine-type properties but Internet-related information businesses. It's going to continue to be very active. 2012 has already been a strong year in M&A, (and) 2011 was a good year. So I'm expecting more of the same (in 2013). Of course, all bets are off if Europe rolls over and plays dead.
MB: Which do you think will be more active in 2013—strategic players or private equity companies?
Rosen: The private equity firms are already outplaying the strategic companies. There are more private equity funds than there ever have been. They have more money than there ever has been. They are heavily competing for transactions. Print media is either near the bottom or off the list for many PE funds. Where they are interested is any kind of online property, or database or subscription-driven product online; they still salivate over such products. There's always some new play to use the Internet for a business-focused website. —M.S.