Are You Ready to Sell Your Database/Market Intelligence Company?

April 21, 2022 |

By Jan Davis, M&A Media Content Creator; Interviewed: Grimes, McGovern & Associates, Jeff Gruenhut, Senior Associate

12 Important Factors a Buyer will Consider

Are you a niche market intelligence publisher not found in mainstream media outlets? Your database product may be valuable to media companies trying to diversify their revenue streams. Media companies are looking for a new revenue mix, and subscription products have become a large part of that mix.

Hundreds of market intelligence databases exist, often within a portfolio of individual webinars and report sales and publications. For example, Grimes McGovern & Associates (GMA) recently advised Irving Levin & Associates in the sale of its assets to Sunwater Capital. Irving Levin provides exclusive intelligence to executives in the seniors housing and health care M&A markets. Irving Levin’s key brands with pending trademarks include The SeniorCare Investor, HealthCareMandA.com, and DealSearchOnline.com.

“Irving Levin was attractive to many possible buyers because of its profitability, steady cash flow, and a strong growth record. Plus, it has a product portfolio that includes a high-margin subscription online database that its users need to do their jobs,” says Jeff Gruenhut, a GMA Senior Associate.

Is your market intelligence firm ready to sell? The ABCs of deal-making is clean financials, a good, accurate view of the sellers and firms like GMA on their profitability, the owner involvement, and what the owners take out of the business. But there are considerations particular to data companies that a buyer will consider:

1. Is the database subscription available on its own or via a suite of products?
2. Contribution of database to the overall company’s product line.
3. Number of subscribers, and is the number growing?
4. Customer retention rates
5. Customer renewal rates
6. Customer conversion rates
7. The cost of new customer acquisition
8. New customer acquisition rates
9. Average revenue per user
10. Customer Lifetime Value (CLV)
11. Are there growth opportunities for the database? For example, can the data be licensed?
12. What is the market for the database? Is it growing? Are their similar deals? Is their VC investment similar to like companies?

A market intelligence data product may be an attractive acquisition by a media company because it provides recurring revenues and added growth possibilities. Is your company acquisition-ready?

Contact John McGovern at Grimes, McGovern & Associates or email: [email protected]