M&A themes for specialist media

Author: Andrea Davies

Word count: 1,000

Time to read: 5 minutes

Recent conversations I have had with entrepreneurs about what investors are looking for in a media business have led me to reflect on a webinar I attended hosted by our friends at Press Gazette: Future of Media Deals – Big Themes Driving M&A in Media 2022.  It was no surprise that the topics of discussion overlapped with Collingwood’s Media Acquisition Report – M&A Outlook 2022-24. and the work we do supporting entrepreneurs with value creation and exit planning.  A number of the themes from that webinar resonated with my own experience of M&A in B2C media. Here are my takeaways:

1. Focus on Tech (even if you do not see yourself as a tech business)

The panel discussed how a media business attracts a higher valuation when it is seen as part of the tech sector.  Growing an online audience and monetising it is fundamental to most B2C media businesses.  However, in my experience, demonstrating ownership of technologies to deliver more and better content to grow audience and engagement is not necessarily front of mind. Many media companies overlook building a best-in-class content analytics capability, yet investors value a digital first mindset and operating model which is designed to understand and serve user preferences through leveraging data, analytics and technology.  

While the panel described the need for media to be seen more as a ‘tech’ business, what I think they really meant is for media businesses to have a greater awareness of how they think about product.  Colleagues at Collingwood have been discussing what the next wave of disruption will look like for specialist media. We believe the businesses that will be most successful will be companies that acquire or hire data expertise, and that adopt best practices from tech product development, product management and product marketing.  Whether the operating model is driven by subscriptions, e-commerce or advertising (or a combination of all three), the most valuable business models require new skill sets and mindsets, a greater awareness of product and a commitment to cross-functional collaboration. 

We’re hosting a webinar, Product Thinking for B2B Media and Information Companies, with a panel of experts to help entrepreneurs think about product differently in their business.  You can register here.

2. Thematics enhance valuations (valuations are not just about profit)

It was interesting to hear the panel discuss the role that thematics can play in driving valuations.  Thematics can be used by investors to assess how resilient and prepared your business is for the big themes dominating and potentially disrupting your world in the future.  The discussion covered the full breadth of zeitgeist themes from ESG to Crypto; augmented reality, AI and increasing automation; as well as the future of work.  The takeaway for me was to appreciate the role of ‘future’ metrics in the value creation process but don’t get distracted.  We talk a lot about focus when we are advising entrepreneurs.

In the B2C media sector there is no shortage of themes dominating the headlines about what the next wave of disruption and transformation will look like. From the resilience of advertising in a post cookie, data privacy world to the opportunities to grow subscriptions and memberships.  The temptation is to lose focus and to try and do it all: ecommerce, paywall, podcasts, newsletters, events, memberships, and video.  The winners in this next wave will be those media businesses who are strategically focussed on maturing and scaling their core products in order to create value, rather than trying to address all the noise circulating the media and technology sector.  

3. Think vertical as well as horizontal when looking for buyers

The panel discussed the prevalence of horizontal integration strategies in the B2C media sector driving much of the recent M&A activity.  Corporates have focussed on buying market share and in particular, acquiring critical scale across geographies when super-serving a specialist interest audience.  

Future PLC is a great example of this horizontal integration strategy in practice with a number of UK acquisitions including TI Media, Dennis and now turning its attention to the US.  Future has proved it has a good track record of integrating assets that complement its existing portfolio as well as adding new verticals and audiences to its well-tuned playbook and technology infrastructure. Consolidation is a theme most media commentators expect to continue with 2022 beginning with The New York Times acquiring The Athletic.

When it comes to vertical integration and acquiring new skills, the panel observed there was not such a strong track record.  However, acquiring into growth areas and owning more of the digital value chain for businesses can drive value.  This is an interesting area for entrepreneurs to think beyond the obvious buyer pool for their media business.  In particular we have been seeing SaaS businesses looking to integrate content communities – for example, Hubspot buying Hustle and Pendo acquiring Mind The Product. These players  add diversity and higher multiples to the buyer pool. 

4. Five key levers to drive premium valuations

The key levers to drive premium company valuations came as no surprise and fit with Collingwood’s Media Acquisition Report – M&A Outlook 2022-24.  To summarise, the panel’s levers:

  • Recurring, repeatable revenues driven by retainers or members, demonstrating clear management of retention and churn rather than just acquiring new revenue
  • Embedded and resilient relationships across multiple touch points – the ‘must have’ brand in any downturn.
  • Resilient and future proof advertising revenues 
  • Robust multiple revenue streams to improve risk tolerance
  • Leverage technology to show an end-to-end digital business built on data and analytics

The advice for entrepreneurs is to focus on your content strength and to keep in mind the tech perspective. Great content but with technology, data and analytics to drive bigger audiences and greater engagement will increase your company’s valuation.

For more on exit planning and how to maximise your company’s sale value, take a look at Exit Hacks.

Please drop me a line if you’d like to talk about how to create value in your specialist media business.


Andrea DaviesAndrea Davies, B2C Practice Leader at Collingwood Advisory.

Andrea is an experienced business leader and strategic advisor and has spent over 20 years driving transformation at the forefront of B2C media. She has held executive board positions at IPC Media, Time Inc. UK, TI Media and Future plc, leading strategy, M&A and running significant business units.

She played a key role in the sale of Time Inc. UK to private equity in 2018. She set the strategic direction for growth, diversification and value creation, playing a hands-on role expanding brands including Marie Claire, Decanter, Wallpaper and Country Life digitally, internationally and into recurring subscription and membership models. Andrea began her career at Arthur Andersen and gained her ACA qualification before pursuing her passion for media and strategy.