Score one for tradition.
Private equity firms Wasserstein & Co. and MidOcean Partners said last week that upon completion of Prism Business Media’s $530 million acquisition of Penton Media—which is expected to close in the first half of 2007—the combined company will operate under the Penton Media name.
The Prism Business Media name, which has existed less than 18 months, will go by the boards. The Penton name has been around in business media since 1892, when John Augustus Penton launched Foundry .
“Quite simply, Prism hasn’t been around very long, and Penton is a brand that’s been around more than a hundred years,” said John French, who has been CEO of Prism Business Media since the company was formed in 2005 and has been named CEO of the combined company. “You have to take the brand with a strong legacy and that’s best known.”
David Gaglione, director of brand strategy at Landor Associates, a branding and design consultancy, said: “It was the right decision. You need to leverage the name with the strongest amount of equity. “There’s a good story here, and you want to tell it through one name, not two.”
French said it was too early to address any specifics about potential synergies between the Prism and Penton portfolios. “We’re just beginning the process,” he said.
Once the deal is completed, it’s back to the future for French. He worked at Penton Media from 1989 to 2002, when he joined Primedia, Prism’s predecessor company. During his previous tenure, French ran the Penton Electronics Group, where he was VP-group director for five trade titles and four related trade shows.
David Nussbaum, the current CEO of Penton, will leave the company after the merger is completed. Nussbaum could not be reached for comment.
Tom Kemp, former chairman-CEO of Penton, who is now managing director of private equity firm Veronis Suhler Stevenson, said of the selection of French, “They’ve had the benefit of working with John since they bought Primedia, and the business has performed well.”
Kemp said there is very little overlap between the two companies and pointed to complementary markets such as aviation and electronics. Both companies also have fast-growing e-media operations, he noted.
Asked if the new company will be able to raise its ad rates, Kemp said: “Scale in b-to-b publishing doesn’t provide pricing power with advertisers. Most markets are still competitive and are not commoditized. The combination won’t give the company pricing power but will provide financial benefits in scale and cutting inefficiencies.”