Last week Post Capital Partners, a New York-based private equity firm, closed a deal to acquire Agent Media Corp., a Clearwater, Fla.-based direct marketing and publishing company serving the U.S. insurance industry. Financial terms of the transaction were not disclosed.
The first few days of Post Capital’s ownership were out of the ordinary in that they were spent cleaning Agent Media’s flooded offices from the hurricanes that have pounded Florida. That, however, is about the only unusual element of the deal, which for the most part is consistent with several trends in b-to-b media.
First, Post Capital’s acquisition continues what has been a stronger year for media mergers and acquisitions. Through the first half of this year, the total dollar value of deals reached $707 million, up 33% from the first half of 2003, according to media investment bank DeSilva & Phillips. Similarly, DeSilva & Phillips calculated that the number of deals totaled 51, up 63% from the year-earlier period.
Second, the Agent Media deal continues a trend of b-to-b acquisitions by private equity firms. While a handful of deals in the last year have been completed by strategic buyers--such as CMP Media’s acquisition of Cliggott Publishing and the Oncology Group--private equity firms have been the clear leaders in b-to-b media investing. The biggest deal of the past 12 months, Advanstar’s purchase of Thomson Media’s Medical Economics and related properties, is backed by Credit Suisse First Boston’s DLJ Merchant Banking Partners III.
Additionally, Cygnus Business Media, among the most active buyers in b-to-b media, is backed by ABRY Partners. And Hanley Wood, which acquired Meyers Group, a construction information company, is backed by Verons Suhler Stevenson.
Finally, and perhaps most important, the Agent Media deal shows the increasing importance of databases for b-to-b media. While Agent Media publishes Agent’s Sales Journal and Insurance Marketing, the heart of the deal is a database of 1.2 million insurance agents, which includes 880,000 independent insurance agents.
"They have a large list rental business," said Roscoe Smith, who is the new CEO of Agent Media. "They have a creative services group with a copywriter and art director, so the company also does direct mail campaigns."
Additionally, Agent Media controls an opt-in e-mail list of 350,000 insurance agents, Smith said. He expects that list will only get larger, and the company should be able to leverage new products.
With this list and the offline database, Smith sees potential in adding market research and similar products to Agent Media’s mix. He also has plans to add products through internal expansion and additional acquisitions.
Overall, Smith said he and Post Capital have acquired a strong business. "Over the last four years, even in the recession, they never really had a decline in revenue," he said.