With two recent deals, United Business Mediaâs CMP Media made it clear where it believes near-term growth will be: the health care market. On Nov. 3, United Business Media announced the acquisition of the Oncology Group and Cliggott Publishing from SCP Communications. The price was $37.5 million in cash, which was said to be eight times projected 2004 operating profit.
Both units are being integrated into CMP Healthcare Media. CMP said the publications included in the deal, such as Oncology and Consultant, will be used to boost the continuing medical education offerings of CMP Healthcareâs CME unit.
New titles an âexcellent fitâ
"These leading titles are an excellent fit with the current portfolio and give CMP Healthcare Media, whose revenues grew by 14% in the first half of 2003, a platform to develop new multimedia professional education products for the oncology marketâproducts that can be promoted by CMP Healthcare publications," said Gary Marshall, CMP Media CEO, in a statement.
"Itâs a firm statement that theyâre in medical publishing," said Richard Mead, managing director of media investment bank Jordan, Edmiston Group. "Itâs a statement theyâre in for the long term."
Roland DeSilva, managing partner of media investment bank DeSilva & Phillips, applauded the deal. "It gives [CMP Healthcare Media] a much greater breadth in the health care market," he said. "Itâs a very good, strong buy for them."
The acquisition is CMP Healthcareâs first since 1999, said Vicki Masseria, group president of the unit. The deal expands CMP Healthcareâs portfolio of publications, which, prior to the acquisition, generated about 25% of the unitâs revenues. CME, for the most part, makes up the rest of the portfolio.
The new journals help balance the portfolio. But, more importantly, they also offer a platform to expand CMP Healthcareâs CME offerings into the growing field of oncology. Extending CME into additional specialties is a key growth strategy for CMP Healthcare, Masseria said. In the past, the company has used partnerships with other publishers, such as Jobson Publishing, to create new CME opportunities.
CMP Healthcare plans to keep on staff Jonathan L. Bigelow, president of Cliggott Publishing, and Melissa Warner, president of the Oncology Group.
"We probably will have some costs to take out [in the integration]," Masseria said, "but that is not a primary goal. This is a growth opportunity, not an acquisition where we will see what we can cut out of it."
On the other hand, CMP, which publishes CRN and other technology magazines, obviously is not bullish on the computer-aided design market. On Oct. 31, the company announced the sale of Cadence, which covered the CAD market, to Advanstar Communications, which promptly folded the publication into its own Cadalyst. Financial terms of the deal were not immediately disclosed.