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Casella, Nussbaum join private equity companies

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Count Jim Casella and David Nussbaum among the prominent business publishing veterans who have joined forces with private equity firms to invest in b-to-b media companies.

In February, Casella, former vice chairman of Reed Business Information, entered into a partnership with private equity firm Austin Ventures to form Case Interactive Media (CIM). Austin Ventures said it intends to put $25 million to $100 million into CIM to grow the business.

Last month, private equity firm ABRY Partners and Nussbaum, former CEO of Penton Media, formed Sundance Business Enterprises to invest in b-to-b media, services and vertically focused online properties. ABRY Partners, which owns Cygnus Business Media, has committed $100 million in equity capital for Sundance Business to fuel at least a half-billion dollars in transactional value.

Reed Phillips, a managing partner of media investment bank DeSilva & Phillips, said these types of partnerships—strategic b-to-b media executives backed by private capital—are likely to proliferate.

"More and more [senior b-to-b media] executives are seeing their brethren working with private equity and being successful personally and professionally," he said. "They also see the flexibility afforded by private equity and may be getting envious. [The trend] is good for private equity, but it also means a thinning pool of b-to-b media executives on the strategic side."

Nussbaum worked closely with ABRY Partners during his tenure as Penton CEO from June 2004 through the recently completed sale of Penton to Prism Media for $530 million. (The merged entity retained the Penton Media name.)

ABRY and Sandler Capital Management invested in Penton in early 2002 and along with Nussbaum are credited with bringing the company back from the brink of bankruptcy. Now Nussbaum is eager to leverage his relationship with ABRY to put Sundance on the map.

"The perfect first investment would be a company that primarily transacts online, has a strong brand and all the transactions are of a high value," said Nussbaum, a 25-year b-to-b media veteran who helped launch New Hope Natural Media and Mecklermedia, among other b-to-b brands. "We're going to be looking for companies that have really good customer relationships and platforms for additional growth. That's not to say we wouldn't look at a standard media company."

For his part, Casella said he will be looking at companies with at least a third of their revenue derived online "and a clear path through acquisition to make that 50%." Casella, formerly COO of IDG Corp., also said he would be "very interested" in acquiring standalone events, which continue to show healthy profit margins.

CIM will take a close look at media companies in sectors with solid growth, including IT, health care, energy and "green" markets, Casella said. He stressed that the company is "not looking to build a portfolio like Reed but more of a focus-play on certain sectors and adjacent sectors, which is more representative from my time at IDG."

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