Penton stays busy in media M&A sector

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Penton Media has been busy on the M&A front since emerging from Chapter 11 bankruptcy protection last March, and it doesn't look to be slowing down.

CEO Sharon Rowlands said in an interview that Penton, which cleared $270 million in debt off its books, is eyeing two media properties in particular for possible acquisition. She declined to elaborate.

Rowlands said the company was interested in expanding its portfolio with digital products, events and marketing services. It operates in 18 markets, including agriculture, manufacturing and lifestyle.

“The balance sheet is in very strong shape. We have strong cash flows. So if we can find complementary properties, at the right valuation, we are definitely buyers,” said Rowlands, who would not rule out purchasing print properties.

Penton, owned by MidOcean Partners and U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co., made a big splash in December when it acquired Lebhar-Friedman flagship Nation's Restaurant News (60,000 circ.). Financial terms of the deal were not disclosed.

Penton bundled NRN with existing titles Food Management (47,000 circ.) and Restaurant Hospitality (100,000 circ.) to form the Penton Restaurant Group. The new group puts the company into every major facet of the foodservice market, from restaurant chains to independent outlets to QSR (quick service restaurants).

“They're done with bankruptcy, they've made their payments to creditors, are starting with a fresh slate and are looking around and seeing some pretty good deals,” said Mike Parker, managing director of media investment bank AdMedia Partners.

Penton's M&A strategy illustrates the trend among b-to-b media companies to place their bets on assets that can ostensibly grow and expand their existing verticals rather than buying into entirely new markets.

“Being able to offer full service to your particular segment and having that deep domain scale sort of position is very important,” Rowlands said.

While smaller than Penton, NewBay Media is deploying a similar growth strategy. In January the company bought Electronic Musician, Mix, Radio, Sound & Video Contractor and from Penton for an undisclosed price.

The products “give us a different mission editorially but fit right within our wheelhouse and create more value for our advertisers and readers by having multiple brands within that space,” said Steve Palm, CEO of NewBay Media, which specializes in five markets, including professional audio, broadcast and video, and musical instruments.

NewBay, which is privately held by Wicks Group, in December acquired Broadcasting & Cable, Multichannel News and TWICE from Reed Business Information to align with existing brands such as the NAB Show Daily and Radio World. “We'd much rather be narrow and deep than wide and shallow,” Palm said.

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