The $920 million cash deal will create a combined company with more than 300 publications, 480 trade shows and conferences, 250 Web sites and revenue approaching $1.5 billion.
"It definitely takes Miller Freeman out of the second tier of publishing and their niche publication identity, [and] places them at the fore of delivering technology information to marketers," said Ellen Freeman, president of Carat Freeman, a tech media agency in Newton, Mass.
Miller Freeman and CMP characterize the pending deal, announced April 29, as offering both entities marketing advantages.
A TERRIFIC COMPLEMENT
"Miller Freeman complements us terrifically in terms of product and in terms of market segment," said Michael Leeds, CMP's president-CEO.
"We're strong in magazines and on the Internet. They are a world leader in exhibitions and trade shows and niche publications," he added.
San Francisco-based Miller Freeman, which plans to maintain CMP's headquarters in Manhasset, N.Y., values CMP's credibility so highly that it plans to group its own niche tech publications, such as Dr. Dobb's Journal, Computer Telephony and Embedded Systems Programming, under the CMP brand name.
"CMP tends to have the horizontal publications serving the IT market, while Miller Freeman has the strong verticals," said Joel Novak, managing partner of Veronis, Suhler & Associates. "However, Miller Freeman has strong horizontal trade shows, of which PC Expo is the largest."
Financially, the centerpiece of this acquisition may be CMPnet, the Web portal that includes TechWeb, the EDTN Network and Channel Web. Miller Freeman made no secret that it would consider outside funding for the online business before the year is over, including a possible initial public offering of stock for CMPnet.
"That is something that is almost automatic," said Reed Phillips, managing partner of media investment banker DeSilva & Phillips, of the possibility of an Internet IPO.
Without the potential Internet value, CMP's print publications would have been less attractive to a buyer, said Michael LeConey, an Internet analyst with Security Capital Trading.
"Without the Internet, CMP would have been lucky to get $400 million or $500 million."
TECH PUBLISHING'S FUTURE
While many observers think an IPO is a foregone conclusion, what fate awaits CMP's print publications and the tech publishing market overall is less clear. As tech ad pages continue their decline -- according to Adscope, overall pages declined nearly 14% in the first quarter from the year-earlier period, and CMP's pages fell by more than 27% -- the industry hardly seems an attractive investment.
Still, the combined Miller Freeman and CMP would rank first in tech ad pages and second in tech ad revenue in that report.