Emap

Backing best of breed in a challenging environment

The Company

Emap is one of the UK’s leading business information providers serving the retail/fashion, public services, construction, media and automotive industries. The Company provides information to its customers through four key formats: print and online magazines (35% of 2007 revenues); exhibitions and festivals (32%); digital information services (27%); and conferences (6%).

As well as publishing, the business also organises three of the top four UK trade exhibitions, has the leading publication in most of its core market segments, runs the preeminent international advertising festival (Cannes Lions), and with WGSN (a provider of digital information to the fashion industry) has a high-growth and market-leading information services business. Approximately 75% of revenue is generated in the UK and 25% from international sources including the high-growth Middle Eastern market.

The company’s business model has evolved from being largely reliant on print advertising to being far more diverse and resilient and thus able to tap different corporate budgets other than advertising.

Close to 75% of Emap’s brands are number one or number two in their market. Because of this leadership, the brands are highly valued by customers and enjoy high renewal rates. They also benefit from a flight to quality in a more challenging trading environment when customers will cut budgets on second tier brands rather than reducing spend on the market leader.

The Investment

Apax Funds, alongside corporate partner Guardian Media Group, acquired the business as a result of the three-way break-up of Emap plc at the end of 2007. The break-up led to the sale of the consumer publishing and radio divisions to Bauer Media, a large German media conglomerate, while Apax Funds and GMG took private the remaining B2B division and umbrella organisation.

The strong existing partnership between Apax Partners and GMG through their joint ownership of Trader Media in the UK proved to be a decisive competitive advantage in securing the coveted B2B titles. Apax Partners also had a strong ‘angle’ because of its existing investment in the B2B sector with Incisive Media.

Progress

In the nine months to December 2008, Emap’s revenue grew 3% year on year. This growth was achieved against the back-drop of a difficult trading environment in Emap’s core UK market, where the key end markets it serves, retail and construction, experienced a significant downturn. This was partly compensated for by a strong performance in its public sector end market. In comparison to other media companies, Emap has shown a good degree of resilience, largely as a result of having a streamlined portfolio of market leading products that benefit from customers concentrating budget spend on the market leader.

Since the initial investment, which completed at the beginning of the year, Apax Funds and GMG have worked with the company to complete the senior management team, including hiring David Gilbertson as buy-in CEO from Informa. The Group has also been fundamentally restructured along product lines, with new reporting lines put in place and a new set of performance indicators introduced.