Media lures dealmakers again

Real Deals asked Partner Richard Fetterman for his views on if the worst of the storm has passed for publishing and media companies.

At the end of May US-based private equity firm General Atlantic acquired a controlling stake in London-based Argus Media in a deal valuing the provider of news and data to the energy and commodities sectors at more than €1bn.

It wasn’t the only buyout firm keen to get its hands on Argus. ICG, Permira and Charterhouse Capital Partners all showed interest before General Atlantic prevailed.

A transaction of this nature raises the question of whether the worst of the storm has passed for publishing and media companies, which have struggled through more than a decade of technological disruption and revenue cuts.

Richard Fetterman, a partner at Livingstone with a focus on the media and technology sectors, believes there is increasing interest from buyers for information services companies that provide data and news that other businesses “use as part of their daily work flows”. But clients, he says, “must be ready to pay for a subscription”.

Sticking to the point

In addition to recurring subscription revenues and niche advertising, buyout firms have also seen opportunities to create additional sources of income by developing and diversifying business models.

Even though subscription and advertising revenues are the backbone of such companies, growth opportunities in these segments are limited. “There may be an element of continued international roll-out,” Fetterman says. “Or there may be the ability to slice and dice the information and present it in a slightly different way.”

When the revenue curve of the traditional sources of income becomes flat, one of the most common ways to seek growth is events. “There is a virtuous circle between events and information – event attendees can be converted into subscribers and subscribers can be converted into either delegates or sponsors at events,” Fetterman says.

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