The two large b-to-b media and information deals announced last month offer clues not only to the sector's M&A outlook but also to the state of its health. In the more recent of the transactions, United Business Media agreed to buy Canon Communications from private equity fund Spectrum Equity Advisors for $287 million. Earlier in September, IHS Inc. announced its acquisition of the SRI Consulting business and other properties from Access Intelligence, which is owned by a Veronis Suhler Stevenson private equity fund. The deal was valued at $80 million. The deals point to a general uptick in b-to-b media and information M&A activity this year. “The deal market is picking up, which is a good thing,” said Tom O'Connor, managing director at Berkery, Noyes & Co. While the Canon and SRI deals took place in the broad b-to-b media and information sector, none of the acquired businesses is heavily focused on the more traditional part of b-to-b media: advertiser-supported trade publications. “The deal flow has moved to software,” O'Connor said. Nonetheless, industry observers see UBM's deal for Canon, which is on track to close this year, as a positive harbinger. “It's heartening that a quality deal can get done,” said Ed Fitzelle, managing director at Whitestone Communications. “Even quality deals weren't getting done in 2009.” On the other hand, Fitzelle and others acknowledged that both UBM and Canon can be seen as special cases in b-to-b media. On the buy side, UBM is one of the few large companies that has both the interest and capability to acquire. “There isn't anybody out there who is a stronger buyer [than UBM], who is independent enough and strong enough to do that kind of deal,” Fitzelle said. UBM CEO David Levin said the company was likely not finished making acquisitions. “We're going to continue with bolt-on acquisitions, although probably not at the size of Canon,” he said. In the past five years, Levin said, UBM has done 80 deals, 37 of them in North America, including the Canon transaction. The company has spent about $1 billion, $765 million of that in North America, on acquisitions. Currently, it generates more than half its revenue from North America and, once Canon is integrated, that figure will be close to 60%, Levin said. Richard Mead, managing director at Jordan, Edmiston Group, applauded Levin's strategy. “Over the past five years, UBM has pursued a patient, well-thought-out acquisition strategy to develop existing core sectors as well as adding to their sector and media depth,” he said. On the sell side, Canon is itself a rarity: a private equity-backed company that could sell at current prices and make a profit for its investors, observers say. The deal was based on a multiple 7.8 times trailing EBITDA, industry observers say. “Canon is different if you believe the multiple, because that's a real multiple,” said Fitzelle, who cautioned: “That doesn't mean that every b-to-b publishing business is going to suddenly get a multiple like that.” What made Canon stand out is that it focuses on the relatively healthy market for medical devices, had strong positions in paid- content entities such as trade shows and had international reach, especially in Asia. Although Canon operates trade publications, its focus is trade shows. Although IHS' deal with Access Intelligence included trade publications, the focus was on SRI Consulting, a paid-content business. IHS is primarily a b-to-b information company, deriving more than three-quarters of its revenue from subscriptions. “This acquisition will help IHS leverage its extensive energy and economic analysis assets within the chemical industry and become a key building block for establishing IHS as a leading chemical industry information provider,” IHS Chairman-CEO Jerre Stead said in a statement.