A sampling of their latest headlines (see link) illustrates the business they do: Jade Media Acquired by CherryRoad Technology, Inc/CherryRoad Media, Inc; Three North Dakota Newspapers Acquired by NorDak Publishing; The Gadsden County Times Acquired by Local Ownership.
The firm is headquartered in New York City and has new offices in Cayucos, California, the first major West Coast-based presence for the firm. They’re seeing the most activity in the Northeast, partly due to concentration.
In 2018, John McGovern, who had been running part of the firm for a decade, acquired the firm from Larry Grimes and is now sole owner. The Grimes family is no longer involved in the firm.
The company has two divisions: a newspaper division and a global media information services and events division On the newspaper side, “our sweet spot more and more is mid-sized newspaper groups,” says McGovern. The company’s specialty is working with sellers who need a high level of service through the M&A process.
The firm has done over 1,600 transactions in its history, including daily and weekly papers, national and regional B2B and B2C mags, conferences and trade shows, digital information and tech solutions companies.
The firm does an initial free assessment for owners considering selling. The firm operates with non-disclosure agreements.
CEO and owner McGovern’s background includes senior VP of Thomson Financial, senior VP at the Fair Disclosure Financial Network and other positions early in his career at Dow Jones/Factiva.
Jim McDonald, a senior associate at the advisory, works the Northeast.
The two gave us some insights into what they’re seeing in the industry. Their comments have been edited for length and clarity.
Jim McDonald: One of the things that I’ve noticed is smaller community publishers are starting to recognize that they’re not going to see any more PPP, which has propped them up throughout much of the pandemic. And some of the larger publishers have come back into the market and are now starting to look at acquisitions and ad-ons that make sense geographically or strategically for them. That’s the good news for the market, that the larger buyers are back in the marketplace after kind of waiting it out on the sidelines, not all of them, but many of them, for the last year or so as they evaluated what was going on. I think that’s good news for community papers in some ways as that gives them a place to go if they are not ready to transition their business to create more digital revenue. There’s a lot of activity in the market, a lot of looking, and the good news is that publishers are back and hopefully being inquisitive again.
John McGovern: The suburbs we view now as an area of strength; more people working from those communities rather than commuting and supporting those retailers who tend to be advertisers in those suburban newspapers. The suburbs had been a really tough place, I think, to compete for ad dollars because you’re competing in a large metro area against big social media players.
News & Tech: Do you think that some of the independent, smaller suburban newspapers or suburban chains might be bought up by some of the larger players?
Jim McDonald: Yes, I do. I have a few companies in one state that are smaller chains and we are talking to larger publishers. Definitely we’re moving into another consolidation phase, I would say for sure. And I think John is right on that publishers are realizing that small community papers in the suburbs have some life and they are highly engaged with their audience and that makes them ripe, really to grow in a lot of ways, if they can expand the number of revenue sources through digital subscriptions, et cetera, they can be long-term good plays.
News & Tech: Did you see a slowdown of sales during the pandemic?
John McGovern: Initially yes, last summer and late spring, but fourth quarter ended up being a normal quarter for us. And then it rounded out the year to be a fairly normal year in terms of number of transactions. That was because of some deals done in January, February, March. It was a busy market beforehand. It is now just as busy, if not more, because as Jim said, you have the larger buyers seem to be back this year, when they were not as active in late 19 and early 20.
News & Tech: If somebody wants to sell their paper, they can contact you. And then what are the steps to get that ready for sale?
Jim McDonald: A lot of people are not prepared for the process of selling. They don’t have their structure organized such that can hand off to someone or they don’t have their books and their key metrics in order to present. We try to present a story about how does this work for the company that’s buying it strategically. We need to work with the publishers to tell that story. Many of them or are not quite ready for that or are lagging behind on that. That’s not everyone: a lot are very much ready to do that and that engagement generally goes a lot smoother. You have to think before you go to market: Are you prepared for the process to go to market? And we talk people through that.
Jim McDonald: In terms of magazines, we actually have a fairly significant buy side engagement from a national magazine company right now, so we are searching for sellers of magazine titles as we speak. We did a magazine transaction, a city and regional late last year as well out of the Dallas-Fort Worth area.
Jim McDonald: One thing that has emerged as we have been seeing clients come on from what I describe as ancillary technology to publishers and media companies that fit into those companies. That's been exciting for us and we’re seeing a lot of activity around them from media companies interested in them globally. I was on a call from the U.K. this morning and another call from Germany, for example, over one of the companies that I have that fits in that category. We have buyers all over the world. I think that’s one of the things that sets us apart.