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Friday, July 07, 2006

UBM buys Commonwealth

United Business Media's acquisition this week of Commonwealth Business Media marks an important watershed in the tenue of David Levin as CEO. It's his first sizable acquisition and can therefore be seen as a signal of future intent.

This is an entirely new market for UBM and is an indicator that the management see digital competence as more important than market synergy. That seems the right approach to me providing the management think about what the learning is from their new business, and how it might be applied in other parts of their business. All senior management teams love doing a deal, but the real work is the post acquisition integration. Never has that work been more important than it is today in a world where new media models need to replace old.

UBM paid a handsome 2.7 revenue mutliple for this business but a modest 12 x EBITDA. UBM can be relied on to pay 12 muliples in most of their transactions. With EMAP already started on a series of buys in the digital business media space, and other business media companies in the mid market needing to, UBM may soon find the competition for assets hotting up.

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