B2B publisher Cygnus Business Media puts its construction and landscape group up for sale
Folio has reported that Cygnus Business Media has decided to place its Heavy Construction Group up for auction. The group includes Equipment Today, as well as six other magazine titles and a trade show.
Many of the industries tied to the group have been hard hit since the beginning of the recession. Home building has been slowed by the fiscal crisis of 2008, and road construction spending has been trimmed back by many states due to budget cuts. With the New Year, Cygnus combined two of its landscape magazines into one title: Pro, a magazine for landscape contractors, was merged with Yard & Garden, a magazine for landscape equipment dealers, into Green Industry Pro.
The Heavy Construction Group is part of the Residential-Construction-Landscape Group which also includes the landscape magazine mentioned above, as well as Qualified Remodeler and Kitchen & Bath Design News, which are presumably not on included in the divestiture.
Important disclosure here, and the real reason for the post: I worked in the Construction Information Group at McGraw-Hill where I published a daily construction newspaper and later launched a magazine (see left-below). I was then recruited to become the publisher of the transportation construction magazine Roads & Bridges. I was the group publisher of four landscape magazines at another company. So these industries are very familiar to me.
A decade or more ago, the construction market was a goldmine for B2B magazine publishers. Equipment manufacturers such as Caterpillar, John Deer, Case and others supported quite a number of magazine titles that were specifically targeting construction equipment. The two big players were Construction Equipment, owned by Cahners (later renamed RBI), and Equipment World, owned by Randall Publishing (now Randall-Reilly). Cygnus’s Equipment World was the third magazine in the field, but the market was big enough to support the three titles, as well as other titles that that didn’t target equipment decision makers directly, but construction, in general (McGraw-Hill’s Engineering News-Record, for example)
Then there were the niche magazines such as transportation construction magazines such as Roads & Bridges and Better Roads. Even more niched magazine like Asphalt Contractor or Pavement Maintenance (both now owned by Cygnus) also attracted construction equipment advertising.
When I moved to Chicago to publish R&B I felt that the emphasis on equipment advertising was driving down rates and failing to see the market as a whole. Contractors and engineers are not totally obsessed with their skid steers and pavers, as they also buy materials and services such as software, insurance and other things – all were prospective categories for advertising.
By the time I left publishing a construction magazine it felt like the industry had reached a high. The latest ConExpo, the huge construction show held every three years in Las Vegas, was another record and surely the segment couldn’t continue to grow forever.
In the dozen or so years since then much has happened in B2B. Cahners turned into Reed Business Information, and Construction Equipment magazine eventually was dumped like the rest of RBI’s titles in the great sell-off that occurred in 2009-10. McGraw-Hill, which was already more a financial services company than still a B2B publisher, still owns ENR and ArchRecord but also sold off Aviation Week (not part of same group).
A decade ago Cygnus’s group would have sold for a pretty penny. In the late nineties, especially, a number of private equity companies engaged in roll-out strategies, eating up titles and small-to-medium sized publishing companies.
One of those was ABRY Partners, which bought Cygnus for $275 million in 2000 – right at the height of B2B magazine valuations. Like most PE firms the idea was to grow the business through acquisitions then eventually sell off the investment. A search for ABRY and Cygnus immediately returns stories of the acquisitions made: Professional Trade Shows in 2003, Asphalt Contractor magazine in 2003, CONEX in 2004…
Then in 2008, ABRY was reportedly about to sell the publisher to Wasserstein & Co. in a deal typical of the time – from one PE to another. But if the timing of purchase in 2000 was not great (right at the highs), the decision to sell in 2008 was not either as the country fell into the financial crisis in the fall. By November that deal was put “on the back burner” as Wasserstein no doubt got cold feet when considering making an investment in B2B media at that time. Less than one year later Cygnus declared bankruptcy and a new CEO, John French, formerly of Penton, came in to run the publisher.
It is hard for me to imagine Cygnus not finding a buyer for the group as the company has not dumped its BPAs, as other publishers cutting corners have done. That means that, at the very least, there is qualified readership for the titles. Any publisher interested in developing digital products such as mobile and tablet editions would have readers to promote to.
But if Time Inc. and The Tribune Company are finding it hard to find buyers for their well-known brands, it will undoubtedly be difficult to find an eager buyer for such a small group of B2B titles. Possible buyers might be medium-sized publishers in the same space who can secure some financial backing.
I can tell you that I loved publishing in those markets, even if friends would ask me “you’re the publisher of what?”
“Yes”, I would answer. “And think about my magazine every time you are in a traffic jam because of road work, or every time you hit a pothole – my readers are the ones doing the construction and maintenance work.”