This week, NewMediaAge, MarketingWeek and The Lawyer publisher Centaur secured a £40 million credit facility from Barclays and RBS to finance digital acquisitions to augment its traditional B2B operation.
The first since is a very smart one. Centaur is buying the digital marketing publisher and analyst and training firm Econsultancy.
The deal involves £12 million in cash now, with up to a further £38 million by 2016 based on profit performance, making it worth £50 million ($78 million).
Centaur CEO Geoff Wilmott explains (via RNS):
“The earnings-enhancing acquisition of Econsultancy provides us with an exciting opportunity to acquire a leading information brand in a high-growth sector with global potential which fits well with Centaur products including Marketing Week and New Media Age.
“Econsultancy is highly complementary with Centaur and gives us a prominent position in the rapidly-growing digital marketing sector with the opportunity to scale internationally.
“We see considerable potential for collaborative growth through leveraging our existing position in marketing and the development of high value, paid-for information services.”
Founded in 1999, Econsultancy is a community for digital marketing professionals. It publishes editorial through a blog, which I used to write for. It has grown to incorporate a reports business, professional development training and events. And it has grown through a New York office and elsewhere.
It reached 100,000 members in mid-2011 and reported 2011 profit of £1.1 million on 50 percent higher revenue of £6.6 million. Much of Econsultancy can be accessed for free, but paid membership ranges between £295 and £3,495 a year.
Centaur has been through troubled times in the classic B2B industry, downsizing a bitter staff and closing the print edition of NewMediaAge.
It’s still loss-making. In the first half of 2012, Centaur made £11.9 from print and £8.6 million from digital – split £4.8 million from advertising, £3.8 million from paid content.
But the firm now has a clear strategy, based on digital information deliery. In October, it told the City it wants to double the proportion of Centaur revenue contributed by digital from the current 26 percent (FY 2011) to 50 percent (FY 2014). MD Simon Middelboe said at the time:
“Selling paid-for services could generate £5 ($7.86) million a year of new paid-for revenues.”
Centaur is planning new niche sub-brands in print, sales lead generation services allied to its
websites (like The Engineer’s Source database) and sponsor-led events It is also mulling acquisitions of subscription-based learning services, performance measurement tools and paid news and deals databases.
Centaur CFO Mark Kerswell said in this week’s announcement of its Barclays financing:
“With funding from Barclays we’re pursuing a strategy of acquisition and expansion into digital and events which will strengthen our offering and brands, enable us to deliver the right content to our customers in the right format, and build more resilient subscription and events revenues.”
Centaur acquired heavily between 2005 and 2007 but froze acquisitions during the downturn until 2010, when it bought Taxbriefs Holdings, which publishes paid-for publications and reports for financial advisers, insurance and pension companies, for a straight £1.9 million in cash.