Former Penton CEO's Oakstreet Media will be shopping for lower-midmarket b-to-b properties
Despite the continuing squeeze on the credit needed to make media deals, Thomas Kemp is upbeat about the prospects for his new media acquisitions firm, Oakstreet Media.
“My wife told me this was a heck of a time to start a business,” said Kemp, a veteran media executive who left private equity firm Veronis Suhler Stevenson on March 31 and launched Oakstreet Media the following month. “She said, "Don't you read the newspapers? The economy is in the dumps.'
“There are challenges in the current market, but in a broad sense, the timing is good. This may be a lousy time to sell but a good time to buy.”
Kemp plans to use capital from a number of strategic partners to purchase lower-midmarket b-to-b media and information companies and then spend three to five years working to meet strategic targets before selling the properties. “My goal is not just to be a passive investor,” said Kemp from his offices in New Canaan, Conn. “My goal is to be CEO.”
The former CEO of Miller Freeman and Penton Media said he began considering an “investment vehicle” about six months before leaving VSS, where he had worked for 31/2 years. He called the transition from VSS managing director to entrepreneur “smooth, orderly and friendly,” adding that while no former colleagues had joined him in his new venture, he anticipated working alongside them on some Oakstreet acquisitions.
Kemp said he is less focused on reaching a particular capitalization goal than on forging alliances with financial backers of various sizes, including VSS. “Scale is important,” he said. “Smaller firms prefer smaller deals, and larger firms go after larger deals.” Oakstreet will target companies with an EBITDA of $5 million to $15 million, revenue of $25 million to $50 million and an enterprise value of $50 million to $150 million, he said.
Among the markets Kemp said he is focusing on are financial services, life sciences, retail, travel and hospitality, as well as other sectors with significant “fragmentation” among audiences and publishers. The best potential targets, he said, are companies that have well-known brands, a reputation for providing excellent content and superior long-term growth, which he defines as greater than GDP. But, he said, the specific market matters most. “You can have the strongest brand and great content, but ultimately the growth of the industry is defined by the size of the served market.”
Kemp said he is especially interested in companies with a robust suite of content-delivery platforms and added that he is not averse to acquiring print assets.
“These days, when you mention print to strategic investors, they put up a cross and say, "I don't want to touch it,' “ he said. “But I'm not afraid to buy a company with a meaningful print component. You can get better value for print media because fewer people are interested in buying them.”