The acquisition of Reed Business Information’s New Products division by former Cygnus Publishing president Richard Reiff is yet another instance of a veteran b-to-b media executive starting his own company backed by private equity.
Reiff announced last week that he is using the purchase to launch Advantage Business Media. He is CEO of the new company, and George Fox, former Cygnus VP-group publisher, is president. They are backed by New York-based private equity firm Catalyst Investors.
Financial terms were not disclosed, but the price was pegged between $10 million and $20 million, according to a person familiar with the situation.
The New Products division includes BioScience Technology, CED, Chem.info, Drug Discovery & Development, ECN, EITD (Electronic Industry Telephone Directory), Food Manufacturing, Genomics & Proteomics, Industrial Maintenance & Plant Operation, Laboratory Equipment, Manufacturing.net, Medial Design Technology, Pharmaceutical Processing, Product Design & Development, R&D Research & Development, ReedLink (an online search vehicle that will be rebranded) Scientific Computing, Surgical Products, Wireless Design & Development and Wireless Week .
Tad Smith, CEO of Reed Business Information, said, “Like many multinational companies, we are always looking to acquire attractive businesses or to prune our portfolio, focusing on future growth.” He said the proceeds from the sale “will be allocated based on decisions made by [parent company’s] Reed Elsevier's board.”
The New Products division, which has a total circulation of 1.3 million, has annual revenue of more than $50 million, according to Reiff. He said Advantage will be “in an acquisitive mode and will be working to grow top-line revenue.”
Rieff said he has no plans to divest any of the acquired properties and that he foresees revenue breaking down eventually between 70% print and 30% online. “I don’t think print is dead, but there’s got to be more of a balance between print and online,” he said. “Reed has done a great job [on the Web, but] we have a lot of work to do with new online designs.”
As president of Cygnus Publishing, Reiff was responsible for 67 trade magazines and 16 custom publications. He became a partner with Cygnus owners Gerry Hogan and Blair Schmidt-Fellner in 1997 when Johnson Hill Press, where he had been president-COO, was acquired by Cygnus.
Reiff is the latest b-to-b publishing veteran to strike out on his own, following in the footsteps of one-time Primedia senior executives Cameron Bishop and Charles McCurdy and former Variety president-CEO Neal Vitale.
“It’s a big trend and it’s going to continue,” said Reed Phillips, a partner in the media investment banking firm DeSilva & Phillips, when asked about the proliferating number of top-level b-to-b media executives who are buying b-to-b media properties with private equity. “The interesting twist I'm hearing is that there is still a lot of private-equity money available, but there now may be a limited number of good management teams. There's a feeling that all the good [b-to-b] execs have been partnered.”