After 19 years at Lehman Brothers, Elizabeth Satin left the investment bank last month to join Jordan, Edmiston Group as a managing director. A specialist in media and communications deals, Satin discussed the current credit crisis' effect on b-to-b media, her decision to join Jordan, Edmiston and her sadness over Lehman Brothers' demise.
Media Business: How do you expect the continuing credit crisis to impact b-to-b media deals? In the past few months, Entrepreneur cited credit issues in derailing its sale, and reports have said that the Cygnus Business Media sale may also face credit concerns.
Satin: It sounds like that [Cygnus] deal is getting done. I think there are a number of ways to look at this question. Quality companies that are exhibiting meaningful organic growth are still going to have many suitors and potential buyers. And we are seeing that for the middle market, leverage is still available. Again, it's available for quality companies with good track records and strong growth.
Now if a company is exhibiting mixed results or if the company's business is directly affected by the credit crunch—so for example, we are seeing the rating agencies have gone down dramatically with less new issuance—then the results can be negatively impacted.
Growth is expected for the industry overall. There are a lot of different subcategories, and there is expected to be 6% to 8% top line growth for the category overall. There are areas that are doing better than others. I would say the market is going to be more selective.
MB: You mentioned that leverage is still available for the middle market. How will the credit crunch impact bigger deals, such as the sale of Reed Business Information?
Satin: There is a staple financing [from UBS] associated with the Reed Business Information deal. The leverage is significantly lower than it has been in the past for companies like Reed. The total leverage is something like 3.5 times debt to EBITDA, which is significantly lower than leverage levels have been in the past, because of uncertainty. We don't know if the banks will step up and provide that financing. We're hearing from some people that they will. We're also hearing from some other people that they won't. My guess is that it gets done, but I don't really know.
MB: How do you anticipate that b-to-b media in general will perform in the near future?
Satin: In some vertical industries a lot of companies are doing quite well in this environment. Critical information is still an important business for the buyers of that information.
MB: What attracted you to Jordan, Edmiston?
Satin: I had known Wilma [Jordan, CEO of Jordan, Edmiston Group,] for many years and admired the business, and the franchise and reputation of the company. And I see the market opportunities in the middle market as being one that is very active, especially as compared to the world of bulge bracket investment banks.
MB: Was your move to Jordan, Edmiston in the works before the demise of Lehman Brothers?
Satin: Yes, this move was in the works.
MB: What did you learn from Lehman, both in good times and recent bad times?
Satin: What do I say to that? It was a wonderful institution, and it pains me to see what's happened. It's a tragedy, a terrible tragedy. M