“Based on our research, Veronis Suhler Stevenson believes total spending on communications will grow by 6.7 percent annually over the next five years, outpacing US economic growth and exceeding $1 trillion for the first time in 2008.
The primary drivers will be accelerating growth in institutional end-user and marketing services spending, in addition to faster growth in alternative advertising and marketing.
2008 will be a year of opportunity for private equity firms that have historically focussed on adding value to growing companies, and who understand the model of performance-based investing.
This is particularly true for the media industry, a highly fragmented industry that comprises more than 19 segments and over 100 sub-segments. The business lends itself to consolidation and add-on acquisitions as large – and many more small and mid-sized companies – are challenged to shift from old to new world business models.
We believe Europe and the CEE are high potential markets for firms with a media and communications expertise, who know how to navigate the multiple legal, regulatory, financial and cultural environments.”
Jeffrey Stevenson, managing partner and co-chief executive, Veronis Suhler Stevenson
VSS had a strong year in 2007. In May it completed one of its largest acquisitions to date of Advanstar Communications. The total purchase price was $1.142 billion.
VSS was joined by several co-investors. The business is a worldwide media company providing integrated marketing solutions for the fashion, life sciences and powersports industries.
It also acquired Cambium Learning, an education company that provides research-based, culturally responsive and proven instructional materials, services and technology to help teachers raise the achievement level of children up to grade 12 students underserved by existing instructional materials.
Other acqusitions of note were MediZine, which it has grown to become the leader in consumer health educational marketing; LaNetro Zed, a Spanish multinational which develops and markets entertainment and community products and services for mobile and the internet; and Loewy which provides brand communication services in most sectors.