Since the recession struck in 2008, several b-to-b media companies have undergone various kinds of “restructuring” or “reorganization” to cope with the fallout from the downturn. The words are often code for bankruptcy—or at the very least signs of serious trouble.
In recent weeks, two b-to-b media companies—Randall-Reilly Business Media & Information and United Business Media—have announced reorganizations, but neither is turning the page to Chapter 11. In fact both companies say the moves are not designed to minimize declines but to position them for growth.
“In the past we've had to reorganize to manage a retreat. This is about reorganizing the business for growth, which is really important to note,” UBM CEO David Levin said. “This is a positive development for the business. This is a growing business, a growing and profitable business.”
Brent Reilly, president of Randall-Reilly, emphasized the structural changes at his company were not cosmetic but a genuinely new approach to the business, which he sees competing more directly with advertising agencies and software companies. “The companies we're competing with today, I don't see them as our competitors in the future,” he said.
UBM's reorganization involves the formation of two new divisions in the U.S.: UBM Technology and UBM Connect. The company said the move is designed to take greater advantage of the potential growth in marketing services.
UBM Technology brings together the previously autonomous businesses of UBM Channel, UBM Electronics and UBM TechWeb. The new group, which will have about $285 million in revenue and 675 employees, will be headed by CEO Paul Miller, who was previously CEO of UBM Electronics.
Robert Faletra remains CEO of the channel group within UBM Technology. Tony Uphoff, who had been CEO of UBM TechWeb, decided to leave the company, Levin said.
For those thinking that the bringing together of the CRN, EE Times and InformationWeek brands under one business unit is a reunion of CMP Media, which UBM acquired in 1999, Levin said, “The CMP business—there's virtually none of that left. Less than 10% of this business could be attributed to the old CMP.”
In 2005, what is now UBM Technology generated about 60% of its revenue from print. Now, that figure is about 8%, Levin said.
A key part of the reunification of UBM tech's businesses is to accommodate large marketers, such as IBM Corp., that do business with all three segments. “First, clients prefer to deal with one organization rather than three,” said Reed Phillips, managing partner at media investment bank DeSilva & Phillips. “Second, UBM probably figured they could streamline expenses by putting their organizations together.”
UBM Connect, which will serve the healthcare, medical device and advanced manufacturing markets, merges UBM Medica US and UBM Canon Publishing. It will have revenue of about $60 million and 240 employees. Sally Shankland, former CEO of UBM Medica US, is CEO of the new group.
Part of Shankland's role will be to accelerate the digital transformation of the former Canon publications, Levin said. “The Canon properties are still very early in the transition from print to online,” he said.
Randall-Reilly, which publishes Equipment World and is the owner of business intelligence brand Equipment Data Associates, has reorganized its business into six “centers of excellence:” audience development, business intelligence, content, custom marketing solutions, events and interactive.
Reilly said the company wanted to unlock the value of certain areas of expertise that had previously been “siloed” in one business unit. “With events, we produce three trade shows and 25 total events, ranging from symposiums to custom conferences; but all of these events were domiciled in the trucking business,” Reilly said. With the new structure, he hopes to create more events in the construction unit.
Reilly hinted that Randall-Reilly may be looking to make acquisitions in markets such as agriculture that have similar characteristics to the trucking and construction industries, which each have equipment manufacturers, dealers, end users and robust aftermarkets.