Who Buys Big Private Equity Owned Media Companies?

When private equity acquires any asset, an invisible clock appears above that company with a countdown. At some point, the private equity firm is going to need to sell that company and thus return money to its investors.

Unlike a holding company like IAC, which can hold an asset indefinitely, a private equity fund has a lifespan. Typically, these funds operate for 7-10 years—though they can obviously go longer if things are not going great. And so, if it’s a seven year fund and the fund buys an asset in year three, the hope would be to sell that asset over the next four years.

Naturally, it doesn’t always work that way and funds last longer than expected. But private equity firms operate with a metric known as internal rate of return (IRR). The important thing to understand is that this metric is time based and so, the longer it takes to generate a return, theoretically, the lower the IRR. And so, when it comes time for them to go raise another fund, they want to show prospective limited partners that their IRR is high.

This is all relevant because there are a number of media companies that are owned by private equity. And a lot of these companies are getting close to the point where their private equity owners are going to want to sell them to achieve a return for their limited partners. Chris Ferrell, CEO of Endeavor Business Media, said this at the AMO Summit:

Most of the big b2b media companies that are private equity owned are really late in the hold period for their PE firms. A whole bunch of them are going to have to come to market over the next 12-18 months. There is going to be a sea change of ownership if they can find new buyers and it will be a really interesting question of who those buyers are. Are there PE firms, is there someone who is willing to make an investment and roll some of those things together? One of the things that is missing from the b2b media ecosystem is there is not a large strategic buyer in the US, other than the event companies.

After talking to a few sources, I’ve put together a list of the various media companies that are owned by private equity. This is a living document that I will update as I learn more information (so hit reply if you’ve got something. I won’t credit you if you want to be anonymous). As you can see in the list, there are some that have been owned by their private equity firm for some time. (Note: Please don’t share this list with anyone. It is a part of AMO Pro. If you’d like to get your team a subscription, please let me know). 

Take ALM, for example. EagleTree acquired this in 2014 when it was known as its predecessor, Wasserstein & Co. EagleTree owns ALM in its III fund, which, according to Pitchbook, was a $403 million fund raised in 2012. And so, it’s been almost twelve years since investors first put money into EagleTree and nearly ten years since ALM was acquired. Obviously the investors can’t force the deal, but you have to imagine that there’s hunger to accomplish it. 

Let’s turn to MidOcean Partners, which owns Questex. This deal was first done in September 2018, so we’re only five years into the life of the acquisition. However, if we look at Pitchbook data, it is likely that this is part of Fund IV, which was a $300 million fund raised in 2015. Therefore, we’re coming up on eight years since investors first started putting money to work. According to rumors, Questex is officially on the market as of this week, which would fit squarely in the maturity of this fund. 

And frankly, it would be a great time for Questex to sell. It’s coming off a banner year. CEO Paul Miller’s about page on Questex’s site refers to his accomplishment in 2023 as, “achieved record breaking revenue and profit growth at Questex.” Questex runs some unbelievably large trade shows and, after the pandemic, this has been a strong year for event brands. 

You can go down the list in that database and see a number of big names that have been owned for some time coming up on the point when their investors are going to want to sell. This is why Chris Ferrell says that the next 12-18 months are going to show changes in ownership. 

This brings us to the big question: who are the buyers? 

For smaller deals, there’s the possibility of selling to a bigger private equity firm. If you look at many of the acquisition announcements, it’s typically from one private equity firm to the next. Ideally, the company has grown considerably while under ownership, so you can get a bigger firm to buy it for the next leg of the journey. 

But what do you do with something like Clarion Events? Blackstone is reported to have invested at a $731 million valuation when it first invested in 2017. Who is bigger than Blackstone? Who can come in and gobble up what could, theoretically, be a billion dollar asset? Blackstone has a few choices. 

First, there’s a strategic buyer like Informa. It has been on a buying streak of late. It first acquired Tarsus in March for $940 million. That was then followed by the acquisition of Winsight in May for $380m. At an event I attended Wednesday, one representative from Informa told a room of media founders and executives that Informa isn’t planning to slow down its acquisitions. After Informa, though, I don’t see many big scale strategics out there. 

Second, there’s the possibility of taking the company public. However, the public markets are certainly skittish right now with uncertainty regarding the ever coming recession. And is Clarion large enough to justify this? 

Third, there are the sovereign wealth funds or family offices. At that same event that I attended, one banker referred to this type of money as “patient money.” It’s not looking to acquire an asset with the goal of flipping it in a few years. Instead, it wants to buy and hold it for the long-term. This is what Jeff Bezos did through his Bezos Expeditions when he bought the Washington Post. He’s now owned it for a decade and it doesn’t appear he has any plans to get rid of it. 

One argument that I have heard thrown around is splitting up the companies. Take Questex, for example. It operates in hospitality, travel, healthcare, wellness, life science, and technology. Couldn’t it just find a strategic buyer for each of those categories and sell itself off for pieces? This would, theoretically, remove the need to find an ever larger private equity buyer. According to one operator I spoke with, this sort of scenario would show prospective buyers that no one wants the whole thing and it would depress the price. This might explain why Future is looking to sell the entire b2b portfolio in one fell swoop versus doing it piecemeal. 

And so, we come right back to the beginning: who are the buyers? As with all M&A, everyone is being very quiet. However, we are going to likely start seeing movement with some of these companies over the coming year if, for no other reason, the funds that own them are going to need to generate returns. And when that happens, I’ll update the database with new information.

Thanks for reading today’s AMO. If you have thoughts, hit reply or join the AMO Slack. I hope you have a wonderful weekend.