While broader economic indicators suggest a recovery may be under way, prospective buyers will likely continue to be cautious and choosy this year. In 2012, robust companies attracted buyer interest and saw relatively good results in terms of EBITDA (earnings before interest, taxes, depreciation and amortization) multiples, Alpert said. The recent annual AdMedia market survey found that overall multiples are flat to slightly down compared with the year-earlier survey. For "strong" sectors, including mobile, advertising technology, social, analytics, Big Data and digital media, at least half of respondents said multiples of 7x EBITDA or greater are reasonable. By contrast, 44% of respondents said multiples of 4x or less are reasonable for traditional media companies. Buyers are less likely to forgive a prospective target's weaknesses than in the past, Alpert said, citing as an example a marketing services or media company that relies on one or two clients for a significant amount of its revenue. "In 2012, it had become much more difficult to sell a company with those characteristics, and valuations really took a hit because of it," he said. Deals that are getting done typically involve a target that has diversified its revenue mix by building pieces of the business that aren't reliant on advertising, said Seth Rosenfield, managing director at investment bank Petsky Prunier
. "The core strength of a b-to-b media company is its knowledge and focus on the market," he said. "So you take that market position and focus on providing additional information and services to both the participants in the markets and also the suppliers to the markets [in the form of] everything from information to analytics to more marketing services." Though an appetite for acquisitions remains low among private equity firms that were burned by previous purchases or strategic buyers that are still figuring out how to transition their own properties from print to digital, there are exceptions, said Reed Phillips, CEO and managing partner of media investment bank DeSilva+Phillips. "If the company is really strong and performing well—and is nicely transitioning to digital—then it becomes attractive," Phillips said, pointing to Penton Media's recent acquisition of Farm Progress from Fairfax Media for $79.9 million as an example. Another exception, he said, is the scenario in which buyers acquire particular parts of businesses. One such example is MediaTec Publishing's acquisition of Workforce Management from Crain
Communications, which publishes Media Business. MediaTec already published titles in the human resources category—including Chief Learning Officer, Diversity Executive and Talent Management Magazine—and saw Workforce Management as an opportunity to cover the entire transactional side of the human resources industry, said Norm Kamikow, MediaTec president and editor in chief. "It really completed the puzzle and enabled us to cover the end-to-end, hire-to-retire business of human resources," he said. The publications, along with a combined database and Web traffic, will provide significant strategic opportunities for the company and its advertisers, he said. For Farm Journal Media, acquiring Commodity Update made sense on multiple levels, said Andy Weber, CEO of Farm Journal Media. The acquisition rounds out the company's media offerings, which include print, online, events, TV, radio and now mobile—an important channel for farmers, who are often literally out in the field rather than at a desk. Weber said media companies must now consider end-users' pain points and how to address those difficulties, whether through acquisition or organic growth. "Media companies like Farm Journal have always reported on the industry rather than truly solving the industry's problems," he said. "We're trying to identify pain points and create products to address those pain points. That's a whole different way for a marketer-based media company to think."