Northstar Travel in play

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Northstar Travel Media, whose properties include Successful Meetings and Travel Weekly, is actively looking for a buyer. Private equity fund Boston Ventures has owned Northstar since 2001; that's more than double the length of time that financial players typically hold a business media property. Neither Northstar nor Boston Ventures would comment on a potential sale. Boston Ventures tried to sell Northstar in 2008, but the effort got derailed by the recession. It is now giving a sale another whirl and will most likely sell to a different private equity player, one industry observer speculated. “There's more of an indication that it's not going to be sold to a strategic company but a private equity fund, because most strategic buyers are not acquisitive right now,” the observer said, adding that a deal would provide an “indication of what private equity buyers are now willing to pay for b-to-b media assets.” Northstar is said to have experienced double-digit growth last year in both revenue and EBITDA (earnings before interest, taxes, depreciation and amortization). It's estimated to have logged about $50 million in revenue in 2011. “Boston Ventures is not going to lose money [on a deal], but it's not going to make as much as they had originally hoped,” the industry observer said. B-to-b media veteran Tom Kemp was named chairman-CEO of Northstar in 2009. Since then, he has diversified the publisher's media portfolio, both organically and through acquisitions, and reduced its exposure to cyclical print advertising. In 2011, for example, Northstar introduced a marketing services division and acquired PhoCusWright Inc., a market research company serving the tourism, hospitality and event sectors. Northstar also announced a partnership with e-book publisher RosettaBooks to produce a travel guide series. The series, called “Destination,” targets both leisure and business visitors and is available through multiple online platforms, including Kindle, iPad and smartphones. However, print still accounts for almost 50% of the publisher's revenue. “Print is a detraction on what people are willing to pay for,” the industry observer said. “Buyers are asking, "How are you modeling, and where's the organic growth going to come from?' ” Northstar's still significant exposure to print advertising doesn't necessarily preclude a deal, according to Chuck Richard, VP-lead analyst at media research company Outsell Inc. “Print is still useful,” Richard said. “The issue is the growth rate, which trumps media mix. Our research shows advertisers rate the effectiveness of cross-media campaigns much higher than single-media campaigns, including pure digital.” He added: “As long as growth is up, print is not penalized. Buyers are broadly indifferent to where the growth is coming from, whether it's organic or through M&A.”
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