Penton sharpens focus on core sectors
By Matthew Schwartz
Penton Media's recent $79.9 million acquisition of Farm Progress from Sydney-based Fairfax Media more than doubled Penton's reach in U.S. agricultural markets. The deal, announced in November, underscores Penton's efforts to bolster its core assets and shed media properties it deems marginal.
The purchase "shows a commitment from our private equity owners that they believe that we should be investing in this business, and that's how we're using our cash," said David Kieselstein, CEO of Penton, which is owned by MidOcean Partners and Wasserstein & Co. "It shows further focus on where Penton is going, which is not focusing on getting into more and more sectors, but becoming more and more focused on the ones we're in and, hopefully, taking disproportionate advantage of that."
The acquisition boosted Penton's U.S. agriculture market coverage to nearly 75% of the 2.2 million farms and ranches in the country and roughly 85% of the nation's annual agricultural gross domestic product, the company said.
Farm Progress, which will become part of the Penton Agricultural Group, has 23 magazines and four events covering various facets of the agricultural industry. These properties include American Agriculturist, Beef Producer, several regional farming titles, the Farm Progress Show and Farm Progress Hay Expo. Farm Progress also offers digital and broadcast products and investment data.
The assets dovetail with Penton's new strategic plan, which includes building professional communities online that are focused on local markets, leveraging data services and growing marketing services, Kieselstein said.
Penton's acquisition of Farm Progress was announced a little more than a month after it sold its media brands covering the marketing industry, including Chief Marketer, Direct, Multichannel Merchant and PROMO, to Access Intelligence for an undisclosed price.
Penton covers 16 markets in addition to agriculture, including commercial aviation, design engineering and electronics. That's down from 19 markets in 2010, when Penton emerged from bankruptcy.
"You have more instances of 'precision M&A' being carried out," said Chuck Richard, VP-lead analyst at Outsell Inc. "The broad and, not necessarily, portfolio-building model has run its course. [Business publishers] with broader portfolios, such as Penton, can be expected to divest, as well as acquire."
Advanstar Communications is also bolstering its core market coverage via acquisitions. In early November, the publisher's parent company, Advanstar Global, said it had agreed to acquire fashion events company ENK International.
The move expands Advanstar's fashion events portfolio, which includes the FN Platform, Licensing International, MAGIC and PROJECT shows. ENK runs fashion events in Las Vegas, New York and Shanghai.
The deal represents another media M&A trend, Richard said. "In going abroad within the sectors that you are strong, the ones you're doubling down on, globalization of events is one of the quicker routes to capturing non-U.S. growth," he said.