BridgeTower Media Completes Second Acquisition in 2024
BridgeTower Media, owner of dozens of local business publications, announced the acquisition of Virginia Business last week to expand its portfolio. Terms of the deal were undisclosed.
In an interview with A Media Operator, BridgeTower CEO, Hal Cohen, discussed the acquisition strategy.
We start from the audience and build from there. We want to find businesses that reach executives regardless of the vertical, whether it’s general business, legal, construction. And we want to find businesses that we can bring into the audience platform we’re building and enhance the overall opportunities across BridgeTower because one of the strategies that we’re making some traction on is to do what we do really well from a sales and content marketing, sales and content standpoint in a local market, but leverage that to sell across markets and across verticals.
And so you take in the 47,000 executives you reach in Virginia, enhance that, bring capabilities that they may not have today to the Virginia business folks, but also bring that audience into the greater bridge tower fold and have more opportunities to sell larger opportunities with our marketing services division.
This is where scale plays a big part for BridgeTower because it can run campaigns at a larger scale compared to any single brand in its portfolio—and there are many.
Imagine an advertiser wanted to reach healthcare executives. It could have done a deal with Virginia Business, but with 47,000 executives in the total database and only some in healthcare, the scale would have been small. However, BridgeTower owns brands with healthcare readers, making it easier for the advertiser to reach scale.
As Cohen explained, “the way we’ve built the business is to take advantage of the shared services that we have and the power and capabilities we can bring to the table and operate much less like siloed individual local marketing businesses.”
This strategy looks a bit like a hub and spoke where the center handles those shared services while each brand has its own sales and content teams. So, by adding Virginia Business to the portfolio, it can bring its sales and operational apparatus to a niche publication and help monetize readers more efficiently.
Aside from Virginia Business’ CEO, Bernie Niemeier, who is leaving, the rest of the team is joining BridgeTower. Cohen said, “It was not a synergy buy. I think where we will help that business grow is the majority of the revenue in that business is print today, but we have some digital capabilities that I think we can bring to the table. It wasn’t a synergy buy. It was really about how can we take what they’ve done really well and grow it.”
This isn’t the first time it’s done this. In February, it acquired Colorado Biz for an undisclosed amount. When asked about the M&A strategy—whether it’s mostly opportunistic or if it is going after these targets—Cohen said both.
We have a target list that we’ve developed over the last couple of years. And some of these are just ongoing conversations that may or may not come to fruition. And then Colorado, we’re very happy. And it was a great deal for us and a great business for us. I would put that more in the opportunistic category. And then Virginia, it was on our list. And we’ve been talking to them for a couple of years before we got this closed.
For BridgeTower, this is only the next step in a long history of its own evolution and growth. Many of its assets were formerly owned by Dolan Media Group, acquired by GateHouse Media out of bankruptcy in late 2015. In 2019, GateHouse’s owner, New Media Investment Group (owned by Fortress Investment Group), acquired Gannett and merged the assets together, taking the Gannett name, while keeping GateHouse’s senior management team.
“We were the only b2b arm of Gannett and it really wasn’t a good strategic fit for us in what we wanted to do and what we wanted to build,” Cohen explained.
So, in 2020, we convinced Mike Reed, who was still Chairman of Gannett, to allow us to go to market. We hired JEGI to see what opportunities were out there for us. The world changed in February of 2020, but we decided it just still made sense. And we plowed through and completed a deal. On Halloween of 2020, we were acquired by Transom Capital.
Since then, it has undergone a digital transformation of its own. Cohen says about 60% of BridgeTower’s revenue comes from advertising and marketing services, with about 60% still from print. “But that’s shifted from, call it 80/20, just a couple of years ago,” Cohen said. “We believe that the inflection point will come next year where digital overtakes print in terms of overall mix in our marketing services business.”
The other 40% of the business comes from subscriptions, events, and public notices. “We own the best companies group, so that does a lot of the best places to work programs you see out in the market,” Cohen said.
In October, Transom will have owned BridgeTower for four years, entering the time when private equity typically expects a return. When asked about any sort of pressure for its own deal, Cohen said:
We understand, as you said, how private equity works and the general lifecycle. So yeah… we are in revenue growth mode. And we know our task is to grow both top and bottom line. But do it as aggressively as possible.
And so, that’s what BridgeTower Media will do. It’s profitable, growing, and has an acquisition strategy to supercharge growth.