Who Are the Buyers in a Warmed up M&A Market?

By Christiana Sciaudone October 25, 2024

By: Christiana Sciaudone

Deals in the media and events businesses have been lackluster over the past couple of years, with a notable exception of Informa.

That’s expected to change with pent-up demand poised for a loosening, but who will be the big buyers?

Informa may not be tapped out yet, despite spending some $3 billion over the past few years on assets like Industry Dive, Tagus, Ascential, and others. Other possible strategic buyers include whoever acquires Clarion Events, which is reportedly on the market; RELX, formerly known as Reed Elsevier; EasyFairs, which secured private equity investment earlier this year; and Hyve, which was picked up by Providence Equity Partners in 2023.

Media & events EBITDA multiples over the years. Informa’s deals (UBM, Ascential, Industry Dive, Tarsus, etc) have pulled the trend line up. Image provided by Robert Gray at EagleTree Capital

That’s a lot of events companies and not a lot of media companies—not hugely surprising given the increasing importance and profitability of events of all kinds while media businesses continue to struggle amid a slumping digital ad market. Such strategic companies, which are able to pay more for properties thanks to anticipated synergies, are more likely to be buying—for right now—than pure private equity. None of the aforementioned companies provided comment for this story.

“One of the factors in any PE firm’s desire to bid for a business is what the competition is going to be, so if you go into process and you hear it’s both strategics and PE, then a PE firm is often less likely to pursue it because we don’t have the advantage of synergies and lower cost of capital,” Robert Gray, an operating partner at EagleTree Capital, which owns ALM, NorthStar, Arc and The Channel Company, told AMO.

When you have a PE-backed company, you get a quasi-strategic situation, “because the model for many firms, including ours, is to build the business through acquisitions… size affords a premium, so you can buy smaller companies and make money by putting them together, ideally rationalizing, professionalizing, putting them on similar systems, and then sell.”

Gray’s also optimistic that 2025 will look a lot better than 2024 in terms of dealmaking thanks to the outlook for lower interest rates. The greater the cuts, the better the chances of seeing M&A take off.

“I don’t think that the industry itself is going to lack for suitors,” Paul Miller, CEO at media & events company Questex, told AMO. “We need an [additional] interest rate cut or two, depending on if it’s two half percent cuts, we’re going to see a real opening of the flood gates. If it’s two quarter percentage point cuts, we’re going to see people get in but still be selective on what they’re looking for.”

Events businesses, specifically, continue to interest private equity firms, Miller said.

“They’re profitable, they’re cash flow positive, they grow every year, at least at GDP,” Miller said.

Where does that leave pure-play media companies? Possibly not in a great place. Questex said it has a winning strategy in combining events with media, i.e., keeping in touch with your audience throughout the year instead of just a few days every 12 months. And, as discussed at the AMO Summit in New York last week, events are the number one trending topic for media companies of all sizes.

Smaller Deals Likely

It’s unclear whether big deals will be on the horizon, but there is clearly interest on a small- and medium-size scale.

Questex is on the lookout for acquisitions, media or events, after reversing course on an attempt to sell itself earlier this year. Now, it’s seeking deals that would likely fall into the $50 million to $60 million range.

BridgeTower Media, which is in B2B media and events, is also looking at M&A and expects more players to jump in as rates drop. Chief Executive Officer Hal Cohen told AMO that, “there’s a lot of dry powder sitting on the sidelines from the PE firms. So I think they’re going to get more aggressive as well.”

Yet another company on the lookout is HW Media, which has made a handful of acquisitions to expand its single-family housing coverage—in fact, anything under a roof (multi-family, commercial, storage) basically counts as an area for growth, Chief Executive Officer Clayton Collins told AMO.

“We’re really good at acquiring small- to mid-size, vertical publishers, and continuing to invest in those brands and teams and growing those businesses,” Collins said. “I’m talking to owners and sourcing deals.”

HW is looking to be opportunistic, proactively reaching out to other publishers, information service companies and data brands that they think would mesh well with their culture and team and “hopefully move some of those to the finish line in the next couple years.”

Collins said the company has averaged a deal a year each of the past four years. “I think we can move a little faster than that,” he said. HW Media will hit almost $20 million in revenue this year. With a buy in the near future, that should easily be surpassed in 2025.

Informa’s Not Out

Informa, as of June 30, had adjusted EBITDA of over $1 billion, according to a company filing. That means it still has the capacity for big acquisitions—maybe not in the billions, but in the half billion range, Gray said.

Informa also has access to capital at better rates than PE, which has tight covenants and depends on leveraged buyouts, Gray said.

That said, EagleTree is looking to spend a $1.2 billion fund closed earlier this year. It has already acquired a marketing firm and a food company. Gray said there are many relevant targets in media and events with $10 million to $15 million in revenue that could be of interest.

Relx is also a big player, but hasn’t tended to opt for big buys. It’s more of a bolt-on bettor, Gray said. Clarion Events has been discussed as a target for a PE acquisition, which could result in further M&A, Gray said. RELX and Clarion Events didn’t respond to a request for comment.

Informa closed a deal to buy Ascential earlier this month and is finishing an agreement to pay TechTarget shareholders $350 million to buy 57% in a new combined company that comprises the former’s digital businesses and TechTarget. Existing TechTarget shareholders will retain a 43% equity stake in the new business. A vote to approve the deal is scheduled for November 26.