Can your media company help a buyer diversify its revenues?

March 10, 2022 |

Digital Advertising is the new normal.

By Jan Davis, M&A Media Content Creator; Interviewed: Grimes, McGovern & Associates-Senior Associates: James McDonald, Tim Smith and Jeff Gruenhut

Media buyers are looking for ways to diversify their revenues because print advertising is taking a nosedive. Digital advertising is the new normal. For example, in the case of Meredith, digital sales surpass magazines sales. “Media companies are looking for a new revenue mix in publication companies, and subscriptions have become a large part of that mix because they are a way to build up business lines and create recurring revenue streams,” says James McDonald, a senior associate with Grimes, McGovern & Associates (GMA).

The New York Times agreement in January 2022 to purchase sports-media company the Athletic is a good example. The $550 million acquisition should help the Times increase its subscription offerings and draw in young readers.

GMA advises on similar publishing-industry deals—acquisitions that drive the buyers’ digital growth and build up new lines of business. Here are a few examples:

• In 2021, Plain Language Media LLLP sold all the information services assets of G2 Intelligence to LabX Media Group. These assets included newsletters, reports, and events, and the industry-leading Lab Institute annual conference. “This bolt-on acquisition of a new product line for LabX Media Group allows the company to enhance their current offerings to their existing clients,” says Senior Associate Tim Smith, who along with CEO & Owner John McGovern represented Plain Language Media LLLP in the deal.

• Royal Media acquired Connectivity Business and its associated assets, which include news and trends of investment in the satellite and telecom sector, data on company stocks, a database of connectivity satellites currently in orbit, and Connectivity Business Investment Forum. “This acquisition represents a significant expansion of the company’s scope and strategy,” says GMA senior associate Jeff Gruenhut. Royal plans to build on the current Connectivity Business offerings to provide even better coverage and information services and products to the market.

• HMP Global purchased the assets of Kestral Health Information, including the flagship brands WoundCon and WoundSource Directory. “With this acquisition, HMP Global can expand its presence in all ways throughout the wound care market by adding a host of complementary resources in a variety of formats: in person, virtual, digital, and print,” says Gruenhut.

What do these three deals have in common? They are all strong, focused businesses that had a suite of products, such as newsletters, reports, and events. These are the types of companies that buyers are looking for—companies that will help them monetize their audiences through diverse revenue streams. Does your company:

• Have a digital presence?
• Have an established subscriber base focused on specific industry and/or demographic?
• Do you sell exclusive or premium offerings?
• Have an event?
• Have you leveraged your data to create additional products, such as a database or annual publication?
• Provide video, audio, or live streaming content?

Buyers are actively seeking acquisitions of media companies with digital revenue streams. In 2021 during the challenging pandemic environment, GMA closed eight deals involving digital media and event companies. Is your company acquisition-ready? Contact CEO & Owner John McGovern at Grimes, McGovern and Associates at 212 255 9700 or [email protected]
to find out.