When Tad Smith, CEO of Reed Business Information, was researching BuyerZone.com as a potential acquisition, he had his exec VP-CFO, John Poulin, give the lead generation Web site a whirl.
"It's amazing. It's just like craigslist. He got quotes back so fast it blew our minds," said Smith, who last summer took the helm of Reed Business. Smith was impressed enough with the service to pursue the acquisition, which closed this month. Financial terms were not disclosed.
"We're excited to bring the value of BuyerZone to our customers because it really works and is a profitable business," Smith said. Asked about the strategy behind the deal, he said: "It's about giving BuyerZone the assets it needs to grow and integrating their assets into our business."
BuyerZone, which introduced its online marketplace in 2000, links prospective buyers to qualified suppliers in more than 134 business product and service categories. These categories include financial products, human resources, marketing, office and industrial equipment, retail services, software services, technology and telecom. Since 2004, BuyerZone has facilitated more than $5 billion worth of transactions, according to Sam Zales, president-CEO.
Once the two businesses integrate their assets, Reed Business will be able to offer lead generation across all its advertising categories. "Every advertiser finds value in publishers' print products and Web sites," Zales said. "Now we can add value [for advertisers] by finding buyers throughout the entire purchasing cycle."
Smith said Reed Business would make all its content available to BuyerZone. The company has about 80 b-to-b print publications, 75 Web sites, and e-mail direct marketing and subscription database businesses.
The potential synergies of the deal could prompt other business publishers to try to align their publishing portfolios with lead generation companies so publishers have less exposure to the cyclical nature of b-to-b advertising.
"Big media companies have got a mandate to grow, and they're all looking at lead generation and how to get there," said Tolman Geffs, managing director of media investment bank Jordan, Edmiston Group, who represented Reed Business in the transaction.
"They have to find some combo of make versus buy, and buying will get you there a lot faster and is about the same cost [as developing one's own lead generation tool]."
"Reed wants to move aggressively into Web revenue and to diversity its advertising base," Geffs added. "BuyerZone is good at taking users through a research funnel, refining needs into specifications and then spitting out a number of vendors."