BtoB

IHS acquires SRI Consulting, ‘Chemical Week' as M&A market shows signs of life

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The b-to-b information and media M&A market continues to show signs of life, as evidenced by three deals that took place in the past two weeks.

Two of the deals were small: NYSE Euronext's acquisition of Corporate Board Member magazine, and United Business Media's RISI unit's $440,000 cash deal (with a potential earn-out of another $440,000) for UM Media, which covers the China paper market. Financial terms of NYSE Euronext's deal were not disclosed.

The most interesting of the three deals was IHS Inc.'s acquisition last week of SRI Consulting, Chemical Week and other chemical and energy information products from Access Intelligence. Financial terms of that deal were also not disclosed, but the EBITDA multiple was said to be strong.

Englewood, Colo.-based IHS is primarily a b-to-b information company. More than three-quarters of its revenue is subscription-based. In addition to publishing Jane's Defense Weekly, it has paid information products serving the energy, economics, geopolitical risk, sustainability and supply chain management sectors.

“This acquisition will help IHS leverage its extensive energy and economic analysis assets within the chemical industry and become a key building block for establishing IHS as a leading chemical industry information provider,” IHS Chairman-CEO Jerre Stead said in a statement.

An IHS spokesperson declined an interview request, citing a “quiet period” before the publicly traded company releases its quarterly results on Sept. 22. For its second quarter, which ended May 31, IHS posted revenue of $266 million, up 13% over the year-earlier period. With performances like that and little debt, IHS, like other subscription-oriented companies, was in a position to make acquisitions in a way that debt-ridden b-to-b media companies are not.

Quayle Munro, the investment bank that handled the deal for Veronis Suhler Stevenson, Access Intelligence's owner, “only approached strategic buyers, they didn't approach private equity funds at all,” said Hal Greenberg, a partner in VSS Structured Capital Funds.

VSS has owned Access Intelligence for 10 years, an unusually long period for a private equity fund. VSS, however, has only owned SRI Consulting, the main part of the deal, since 2004.

In an interview, Don Pazour said he “absolutely” intends to continue as CEO of Access Intelligence. The divestment of these products shrinks Access Intelligence significantly—SRI alone accounted for about 25% of the company's revenue. Pazour said that, overall, 40% of the company's revenue departed to IHS as a result of the deal.

Nonetheless, Access Intelligence still offers information products in the aerospace, communications and health care management markets. Its brands include the Aircraft Value News, CableFAX Daily and Defense Daily newsletters.

“This transaction will provide new growth opportunities for our departing colleagues and leave AI debt-free and able to focus investment on the growth of some of our less-developed clusters of information and marketing products,” Pazour wrote in a memo to his Access Intelligence colleagues.

He said that Access Intelligence plans to grow organically and by acquisition, adding that he sees great opportunities in paid content and e-commerce in this time of upheaval in b-to-b media.

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