Signs point to continuing recovery for b-to-b media

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There are many signs that the b-to-b media industry is inching toward recovery.

The October Business Information Network figures, which were released last week by American Business Media, showed that through October ad pages were up 0.9% and ad spending was up 3.3% compared with the same period in 2003.

"Fourth-quarter numbers are coming in at the range we had expected," Gordon Hughes, ABM's president-CEO, said in a statement. "We are still forecasting that we will end the year with 2% to 4% revenue growth."

As the head of the key business media trade association, Hughes is expected to be optimistic about the industry, but he is not alone in offering a bright outlook. GE Commercial Finance/Global Media & Communications, a unit of General Electric Co. specializing in lending to the industry, had a strong 2004 and is bullish on 2005. It’s a sure sign that an industry is regaining its footing when its suppliers are optimistic.

"We had a very good year [in 2004] in terms of deal flow," said Bob Stefanowski, business leader for GE Commercial Finance/Global Media & Communications. "We got our fair share of refinances."

The unit is anticipating an even stronger performance in 2005. "B-to-b media is starting to build on a stable base. We’re looking for bigger and better times ahead," said David VanderLugt, senior VP-media origination.

The stability can be seen in the year-to-date BIN figures, which weren't on the negative side of the ledger for the first time since 2000.

In addition to the improved performance of b-to-b media companies, VanderLugt and Stefanowski said low interest rates and a general turnaround in the larger economy buoyed their business in 2004.

The strength of GE Commercial Finance/Global Media & Communications’ 2004 can be seen in three key deals in the b-to-b realm:

—A refinancing deal for Randall Publishing Co., owner of Equipment Data Associates and publisher of Equipment World, Commercial Carrier Journal and other publications.

—A $220 million refinancing and recapitalization deal for Cygnus Business Media, a multimedia company whose properties include Firehouse Magazine and Enforcement Expo.

—A deal backing Seaport Capital’s acquisition of Virgo Publishing, which produces publications including Forensic Nurse and Modern Car Care.

GE also facilitated several other deals outside of b-to-b media, including the arrangement of senior facilities for Multicultural Radio Broadcasting and Communications Corp. of America.

For the most part, Stefanowski and VanderLugt said, the deals in 2004 tended to be refinancing and recapitalizations for existing clients. They are optimistic that mergers and acquisitions will pick up the pace in 2005, providing the opportunity to complete deals for new clients. "I’m counting on it," VanderLugt said.

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