Company-building 101

The fast and furious pace at which 1105 Media was formed two years ago and rapidly expanded upon through multiple acquisitions since has been just another day at the office for Neal Vitale, the company's president and CEO.

After all, he did it before, with Petersen Publishing in the late '90s when he and his private equity partners bought that company, took it public and sold it in two years flat. Not that Vitale's intending to do the same with 1105 — he's still busy acquiring properties and growing the company's portfolio in a number of different market sectors.

In April 2006, Vitale, along with Boston-based private equity firms Nautic Partners and Alta Communications, started 1105 from scratch with the $75 million purchase of 101 Communications. Days later, the trio scooped up Dallas-based Stevens Publishing and its seven magazines and newsletters. With those two established brands in hand, they were just getting started.

In short order, other acquisitions followed: Post Newsweek Tech Media from The Washington Post's government and publishing group, which included FOSE; FETC, the Florida Educational Technology Conference; and the GovSec, U.S. Law and the Ready! Conference & Exhibition series.

Tradeshow Week Senior Editor Rachel Wimberly spoke with Vitale about the strategy behind 1105 and the company's next moves.

Question: You purchased Peterson Publishing in 1996. Did that deal establish your road map for the partnership with Nautic Partners and Alta Communications and the acquisition of 101 Communications (in April 2006)?

Answer: Sure. It's the same kind of approach and, certainly in the intervening period, there were a lot more private equity firms backing executives and looking to do deals like Petersen or like 1105, so it took a while to find the right opportunity.

Q: What was the timeline for the acquisition, sale and public offering of Petersen?

A: It was pretty quick. We bought it in 1996, went public in 1997 and the business was sold in 1998.

Q: What did you do then?

A: I was CEO of a company called Aspen Marketing Group, which was a Brentwood Associates-backed business in the marketing services arena. After having done that for a while, I sort of had a hankering to get back into the media business. I like the people in the media side of things quite a bit. I think the folks who are interested in content and information are a good group to work with.

I started a process of looking at a number of different businesses probably over a course of four or five years with Nautic, with Alta and even with some other private equity firms in different combinations. I looked at a wide array of types of businesses until we finally found the ones that we could get over the finish line.

Q: 101 Communications was on the market for eight months. What made it an attractive buy?

A: We were able to bring two businesses together, 101 and Stevens (Publishing) ... each of which had their own independent infrastructure, and combine them. Pretty much (from) day one we had made a better business than what we acquired, simply by combining the costs of the two organizations.

That's always an attractive thing from an investor's standpoint because you have immediately created some value in that process.

Q: Since then, you have acquired several more properties. How do they fit into your overall strategy for 1105?

A: Our strategy had a couple of components to it that were important. One (was) we wanted to diversify more into events, and we clearly have done that. We are now probably 40 percent in print, 40 percent in events and the balance being online and other information revenue streams. We've been pretty successful in building the events side of our business.

We also wanted to deepen and expand our presence in the markets that we serve. We wanted to have more offerings in each of those areas. Our view is (that we want) to be a multimedia player that has a portfolio of properties in every market that we serve. I think we've done a pretty good job of establishing that.

Q: What other kinds of acquisitions do you have planned?

A: We're always on the lookout for where there are things that we think are complementary and provide a good fit.

Q: Are there more tradeshows on the horizon?

A: While we have a lot of events, the number of large tradeshows is still pretty small. We'd be happy to have more tradeshows in the portfolio, but we're not the only folks who are looking at that.

I think we've done pretty well in certain ... sectors, but there are clearly shows that would be wonderful complements to our portfolio, though I'm not at all confident that we can acquire them.

Q: Is it because at the moment face-to-face events are so desirable, compared with print?

A: Right. I don't think anybody's seeing tradeshows and conferences being replaced by Web offerings. If you think about the nature of traditional publishing, there's a certain amount of inefficiency in the business. You're advertising in a page in a magazine where only a fraction of the people receiving that magazine are probably actually interested or ready to buy your product at that moment. A lot of activity online is focused on making that a more efficient process, so that's a bit of the tension.

I don't think you have the same pressures on live events because there's still no replacement for the networking and human interaction you get at a successful event.

Q: 1105 only has one brand replicated overseas, Recharger. Are you looking to do more?

A: Sure. Now, with a couple years of getting the organization put together and a little history behind us, I think we're comfortable starting to think about some international activities.

Q: In terms of organic growth, is your priority to dig deeper into the sectors you already serve or to reach out into other markets?

A: Our first priority is to continue to build in the sectors and the niches that we serve, and we think there are plenty of opportunities to go deeper into those areas. We would be happy if there was another sector that we thought would be attractive and complementary to the rest of our portfolio. I don't want to get into an entirely disconnected field (though) because I think that sort of dilutes what we are about as a company.

If you look at our portfolio, while it's not a perfect situation, I think a lot of groups are complementary and coexist pretty nicely. Being in the security and safety areas is good when you are in government and education. We're happy to look at new verticals to serve, but they have to be a big enough scale to make it worthwhile. I don't want to have a little bit of business in lots of unrelated areas.

Q: You've acquired a number of companies in a relatively short amount of time. What have been some of the challenges integrating all of that under one banner?

A: There's a natural amount of staff turnover in a situation like that. You always get that no matter how well you organize and orchestrate an acquisition and the integration. The continuity issues that arise from that are one of the challenges.

Where you are in the cycle, particularly when you are buying a tradeshow — if you are buying something, as we have, when you are only a few months out from the event — you have a show under your ownership that you've had very little to do with. The nature of that is also that, if you are looking to refine that or change anything about the show, your time frame for having an impact is so long.

Q: In the private equity world, there's usually a buy-build-sell turnaround of 10 years or less. How does this fit into your plan for 1105?

A: Our view, and certainly my view, in terms of managing the business is just to run a good business and focus on the business activities — don't focus on the financing and ownership issues. If the business is growing and strong, there are always going to be people interested in owning or investing in that business.

I think it's important for the management team to be very focused on the markets they serve and the products they offer, not what the state of play happens to be in terms of the owners.

Q: You've hired a lot of people with extensive backgrounds in the business-to-business media industry. What was your strategy in those hires?

A: It's kind of a cliche, but this is a people business after all. It's about brands and about people who support those brands. We're always looking for strong people. You can never have enough of them.

We've tried to find people who are interested in our approach and like what we are doing and want to be part of that team going forward. There's always room for good people.

Q: If you weren't in the B-to-B media industry right now, what would you want to be doing?

A: What could be better than the B-to-B industry? This is what I've done for much of my life. From a business standpoint, this is a very interesting place to be.