Cygnus Business Media, Inc.

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Cygnus Business Media, Inc.

830 Post Road East
Westport, Connecticut 06880
U.S.A.
Telephone: (203) 227-4037
Fax: (203) 227-4245
Web site: http://www.cygnusb2b.com.

Wholly Owned Subsidiary CommerceConnect Media LLC
Incorporated: 1996 as Cygnus Publishing, Inc.
Employees: 640
Sales: $75 million (2002 est.)
NAIC: 511120 Periodical Publishers; 511140 Database and Directory Publishers; 561920 Convention and Trade Show Organizers

As of mid-2003, Cygnus Business Media, Inc. published 80 business-to-business (B2B) publications consisting of trade magazines, directories, and card decks. The company also produced 47 trade shows, many of them related to its print publications. In addition, its B2B Web sites had more than 90 million page views in 2002, with nearly one million unique visitors.

Cygnus Business Media is organized into four divisions: Cygnus Publishing, which produces 51 B2B magazines with a combined circulation of nearly three million and covering 15 major markets; Cygnus Interactive, which manages the company’s 68 Web sites; Cygnus Custom Marketing, which publishes custom publications to meet specific client objectives; and Cygnus Expositions, which runs the company’s nearly 50 trade shows and expositions.

Formed in 1996, Cygnus Business Media became a player in B2B publishing with the 1997 acquisition of PTN Publishing, Inc. The acquisition brought to Cygnus more than 50 B2B publications serving 14 markets as well as several custom publications and related trade shows. From 1997 through 1999, Cygnus acquired new publications and trade shows and also divested some of its periodicals. In 2000, Cygnus was acquired for $275 million by CommerceConnect LLC, a company formed by Paul Mackler and ABRY Partners, LLP for the purpose of acquiring media properties. As a subsidiary of CommerceConnect, Cygnus embarked on an aggressive growth strategy, including acquisitions and new product launches, which it carried out over the next several years.

Publisher of Business-to-Business Magazines: 1996–99

Cygnus Business Media, Inc. was organized in March 1996 under the name Cygnus Publishing, Inc. The company was headquartered in St. Petersburg, Florida, and founded by two media veterans, Gerry Hogan and Blair Schmidt-Fellner. Hogan was formerly the CEO of the Home Shopping Network and previously was an executive at Turner Entertainment Networks and Whittle Communications. Hogan teamed with fellow former Turner executive Schmidt-Fellner in 1996 to form Cygnus Publishing, with Hogan as chairman and CEO and Schmidt-Fellner as COO. The company was established with financial backing from New York investment banking firm Kelso & Company.

Cygnus’s mission was to acquire media properties. Although Hogan and Schmidt-Fellner were more familiar with electronic media, they were also interested in publishing. They were especially interested in business-to-business (B2B) publishing. As Hogan told Folio: The Magazine for Magazine Management in 1997, “We think business-to-business publishing is undervalued. The need for information among business people in America is skyrocketing.”

After looking at various media properties for about a year, Cygnus acquired PTN Publishing, Inc. in mid-1997 for about $100 million. Based in Melville, New York, PTN was a major publisher in the B2B market. The company had 52 trade magazines and also published custom publications for clients such as Goodyear Tire and Rubber and Caterpillar. PTN also conducted trade shows and expositions in connection with some of its publications, including the annual Firehouse Expo and the National Pavement Maintenance Expo. CEO Gerry Hogan said of the acquisition in the St. Petersburg Times, “We intend to use this acquisition as a platform to begin building a serious media company.”

PTN, which stands for Photographic Trade News, began as a publisher of trade magazines for the photographic trade in 1937. Although its first publication was Photographic Trade News, the company later acquired the printing industry periodical Printing News, which began publication in 1928, and Ink Maker, a publication for manufacturers of printing inks and related graphic arts specialty colors that began publication in 1922 as American Inkmaker. Other printing industry magazines published by PTN at the time it was acquired by Cygnus included Modern Reprographics Magazine (founded 1993), Print Business Register (1986), Print on Demand, and Quick Printing (1977).

In 1994, PTN acquired Johnson Hill Press of Fort Atkinson, Wisconsin. At the time PTN published nearly 30 trade publications. The acquisition of Johnson Hill added another 13 non-competing B2B magazines serving industries such as agriculture and food, aviation and transportation, building and home products, and construction equipment. Among the Johnson Hill titles that PTN acquired were Farm Equipment Magazine and Feed & Grain (both established in 1969), Aircraft Maintenance Technology Magazine (1989), Airport Business (1993), Fleet Maintenance, Ground Support Magazine (1993), Mass Transit Magazine (1974), Qualified Remodeler (1975), Wood Digest Magazine (1984), Construction Distribution and Equipment Today (1966), Pavement Magazine (1985), and Rental Product News (1978). Following the acquisition of Johnson Hill by PTN, these and other Johnson Hill publications continued to be published at the Fort Atkinson office. In 1996, Laminating Design & Technology and Sport Truck & SUV Accessory Business were launched from Fort Atkinson.

The acquisition of Johnson Hill was part of PTN’s growth strategy being conducted by CEO Stanley Sills, who became head of PTN in 1987 when he acquired the firm along with Chase Venture Partners and Chicago-based investment banker Golder, Thoma, Cressey, Rauner, Inc. In 1992, PTN gained an additional $20 million worth of equity financing from Golder, Thoma. While the price of Johnson Hill was not made public, Folio estimated the cost at $25 million. By 1995, the owners of PTN were searching for an exit strategy. The company had annual revenue of about $70 million, according to estimates published in Folio. Among the new partners it was considering were Penton Publishing in 1995 and then Prudential Insurance Co. of America in 1996. However, negotiations with Penton did not get past the preliminary stages, and Prudential’s offer of $120 million was rejected. At the time PTN was owned by a partnership between CEO Stanley Sills, Chemical Capital Ventures, and Golder, Thoma.

After acquiring PTN in mid-1997, Cygnus fine-tuned its B2B media empire over the next three years through acquisitions and divestitures involving publications as well as trade shows. In 1998, it entered into a partnership agreement with Maryland-based Spencer Communications, which published four regional graphics arts periodicals. The partnership created the Spencer/Cygnus Regional Print Network and gave Cygnus 49 percent ownership of the four regional publications: Southern Graphics Magazine, founded in 1924; Printing Journal (1974) for the West Coast; Print & Graphics Magazine (1980) for the Northeast and mid-Atlantic states; and Printing Views, which covered the Midwest.

In January 1999, Cygnus acquired the Fire-Rescue West Conference and Exposition from the California Fire Instructors Workshop, which had run the trade show since its inception in 1978. The acquisition complemented Cygnus’s Firehouse Emergency Services Expo and its fire rescue and emergency medical services (EMS) magazines Firehouse and Public Safety Product News.

In May 1999, Cygnus acquired three trade publications from Laguna Beach, California-based publisher Rudy Wolf. The titles were Professional Tool & Equipment News, Body Tool & Equipment News —subsequently renamed Body Shop Expo —and Fleet Maintenance Tool & Equipment News, which was renamed Fleet Maintenance Supervisor. All three titles began publication in the early 1990s. Following the acquisition, Wolf continued to serve as publisher of these magazines from Cygnus’s office in Laguna Beach. Around this time Cygnus also acquired the Journal of the Solid Surface Industry from Joanna and Michael Duggan of Las Vegas, Nevada, who founded the periodical in 1995. Following the acquisition, the journal was renamed Solidsurface, and editorial operations were relocated to Fort Atkinson, where Joanna Duggan continued to serve as the periodical’s publisher.

Micro Publishing News was also acquired in 1999. Founded in 1989, the periodical served the desktop publishing market. In 2001, Cygnus stopped publishing Micro Publishing News and integrated its editorial and circulation operations with Digital Imaging. In mid-1999 Cygnus divested two of its Atlanta, Georgia-based publications, Modern Paint & Coatings and Soap & Cosmetics. The periodicals, part of Cygnus’s Shelter & Interiors Group, were sold to Chemical Week Associates.

Company Perspectives:

Cygnus Business Media is a leading diversified B2B media company offering a variety of marketing and media solutions in every market served, including print, live, and interactive media. Cygnus has four distinct divisions with the talent and resources to provide its customers and clients with unique and effective marketing programs in each of the 15 major markets the company serves.

Before the end of 1999, Cygnus Publishing changed its name to Cygnus Business Media, Inc. to better represent its media properties and business vision. At the time, Cygnus published more than 50 magazines, produced 18 expositions, operated 55 Web sites, produced a variety of custom media publications, and was involved in electronic commerce. In December, the company expanded its trade show and exposition operations by acquiring Champion Productions. Based in Minneapolis, Minnesota, Champion produced 13 trade shows for industries that included information technology, engineering, damage prevention, and the farm, ranch, and agricultural industry. These shows included the Strictly Business Expo, which featured computer-related equipment and software; Damage Prevention Convention for the construction industry; six ranch and farm expositions; ELAXACON for designers, engineers, and manufacturing professionals; and Digital Media Expo for the high-technology sector of the printing industry. Following the acquisition, Minneapolis became the headquarters of Cygnus Expositions, the company’s trade show division.

Aggressive Acquisition Plan: 2000 and Beyond

In mid-2000, Cygnus agreed to be acquired by CommerceConnect Media LLC for about $275 million. At the time of the acquisition Cygnus published 48 trade magazines, produced 16 trade shows and conferences, published 17 custom publications, and operated 60 Web sites. The company projected 2000 revenue of $96 million, up from $82 million the previous year and $66 million in 1997. Owners Gerry Hogan and Blair Schmidt-Fellner left the company following its acquisition by CommerceConnect Media.

CommerceConnect Media was formed in October 1999 for the purpose of acquiring media properties. It was a partnership between CEO Paul Mackler and Boston-based investment firm ABRY Partners, LLP. Mackler was formerly president of Reed Exhibition Companies, North America, a division of media conglomerate Reed Elsevier. Before that he was a principal and CEO of CMC, a company that developed trade shows and expositions in association with a variety of publishers. Following the acquisition of Cygnus, Mackler became its president and CEO. Otherwise, Mackler told Tradeshow Week, “We intend to operate the company as it is now being operated and will keep all management and staff in place.”

Mackler also spelled out his vision for Cygnus’s future. “The strategy for Cygnus is to offer a variety of media solutions to customers and clients in every market served, including print media, live media, and interactive media. We’re going to be very strategic about our acquisitions and our organic growth.”

Cygnus’s first major acquisition under new ownership took place in December 2000, when the company acquired Locksmith Publishing Corp. The purchase included two print media publications, Locksmith Ledger International (established 1939) and Security Technology & Design (launched in 1991); two Web sites— LLedger.com, serving the locksmith industry, and SIMON-NET.com, a security industry portal; and the LedgerWorld trade show and conference, serving the locksmith market. Steve Lasky, publisher of Locksmith Ledger International and Security Technology & Design, joined Cygnus as group publisher of its Residential, Commercial, and Industrial Security Industry Group while remaining as publisher and editorial director of the two acquired periodicals. All of the properties acquired from Locksmith Publishing bolstered Cygnus’s presence in the security industry and complemented the company’s own Security Dealer Magazine, which was launched in 1977 as Security Information and Product News, and its online counterpart.

During the second half of 2000, Cygnus also developed a stronger presence online by making Firehouse.com, a wholly-owned subsidiary and launching a new industry portal, Wood-WorkingPro.com, for the woodworking industry. The new portal complemented the company’s Wood Digest Magazine, which reached more than 50,000 subscribers every month. Fire-house.com, with nearly 20,000 daily visitors, was part of Cygnus’s Fire Rescue and Emergency Medical Services Group that included Firehouse Magazine, the industry’s leading publication with a circulation of 100,000, and several trade shows.

Cygnus made several acquisitions in 2001. At the beginning of the year it was able to purchase complete ownership of the Spencer/Cygnus Regional Print Network from Spencer Communications. In mid-2001, Cygnus acquired Design/Build Business magazine and Web site, which became part of the company’s Building and Home Products Group. The group also published Kitchen & Bath Design News, Qualified Remodeler, Solid Surface, Laminating Design & Technology, and Wood Digest, and it operated five Web sites.

Cygnus expanded its Aviation and Transportation Group with the acquisition of GSE Today magazine, Web site, and trade show in October 2001. The three properties served the ground support equipment (GSE) segment of the aviation industry and complemented the group’s other publications, including Airport Business, Aircraft Maintenance Technology, Fleet Maintenance, Ground Support, Mass Transit, Professional Tool & Equipment News, and related Web sites. In November 2001, Cygnus added Professional Tool & Equipment Distributor, which it acquired from Marketing Advertising Communication Services, Inc. of Illinois. The periodical’s circulation went to 10,000 tool distributors in the automotive industry. It complemented Professional Tool & Equipment News, which went to more than 110,000 qualified automotive repair professionals.

Cygnus’s aggressive acquisitions strategy continued in 2002, when the company purchased several periodicals and trade shows. In May, Cygnus acquired two food-related titles from VNU Business Media: Frozen Food Age, the leading magazine in the retail frozen food industry with a circulation of 17,000, and Food Logistics, the leading periodical for the food logistics and supply chain industry, with a circulation of 27,000. The publications were integrated into Cygnus’s group serving the agriculture and food markets, which also included Farm Equipment, Feed & Grain, and Health Products Business.

Key Dates:

1996:: Cygnus Publishing, Inc. is established in St. Petersburg, Florida, by former media executives Gerry Hogan and Blair Schmidt-Fellner.
1997:: Cygnus acquires PTN Publishing, Inc. and moves its headquarters to Melville, New York.
1999:: Champion Productions is acquired.
2000:: Cygnus is acquired by CommerceConnect Media LLC.
2001:: Design/Build Magazine, GSE Today magazine, Professional Tool and Equipment Distributor magazine, and related trade shows and Web sites are acquired.
2002:: Cygnus acquires Frozen Food Age and Food Logistics from VNU Business Media, eight leading construction and industrial magazines from Vulcan Publications, aviation trade show AS3, and the Fire-EMS Information Network.
2003:: Cygnus acquires more than 25 trade shows from Penton Media, Inc.

In June 2002, Cygnus added half a million targeted professionals to its circulation base when it acquired several constructions and industrial magazines, card decks, and related Web sites from Alabama-based Vulcan Publications. The magazines, which had a combined circulation of more than 300,000, were Construction Site News, Electrical Contracting & Engineering News, Fabricating & Metalworking, Heavy Equipment News, Industrial Machinery Digest, iSource Business, Plant Safety & Maintenance, and Transportation Equipment News. The acquired card decks reached an additional 200,000 professionals and included the National Equipment Card Deck, Plant Safety & Maintenance Card Deck, and Total Outdoor Equipment Card Deck. In addition, four Web sites were included in the purchase: NDX.com, a manufacturing portal; concretepaving.com, which served the concrete and asphalt market; Heavyequipmentnews.com, which served contractors in the highway, heavy construction, building, mining, and other specialized construction industries; and iSourceonline.com, a source of information on Internet-based B2B commerce and procurement. The Vulcan acquisition established a third major publishing operation for Cygnus in Birmingham, Alabama, in addition to its operations in Melville and Fort Atkinson.

In the second half of 2002 and first half of 2003, Cygnus made several acquisitions on behalf of its trade show division, Cygnus Expositions. In August, the company acquired another aviation trade show, AS3: The Aviation Services and Suppliers Super Show, from the National Air Transportation Association (NATA) and the Professional Aviation Maintenance Association (PAMA). NATA and PAMA continued to sponsor the trade show, which was co-located with the GSE International Expo in spring 2003. In January 2003, Cygnus more than doubled its portfolio of trade shows when it purchased Penton Media, Inc.’s Professional Trade Shows (PTS) operation for an estimated $3.8 million. PTS was considered the leading producer of regional industrial trade shows, staging more than 25 shows in 22 states for four principal markets: plant engineering and maintenance, building and facilities, materials handling, and machine tools. The acquisition of PTS, which was integrated into Cygnus Expositions, made Cygnus one of the ten largest trade show organizers in the United States based on the number of shows it produced. In other trade show developments, Cygnus staged its first Firehouse World Exposition and Conference in San Diego in February. The company also acquired the Solid Surface International Trade Show and Exposition from Nevada-based International Solid Surface Fabricator’s Association in February. Solid surface materials were most commonly used in kitchen and bathroom countertops and were also used commercially in food courts, banks, airports, and malls. In addition, the company announced it would launch two new trade shows in 2003, the Iowa Farm Show in August and the Mid-Atlantic Print Expo in spring 2003.

Cygnus also bolstered its online division, Cygnus Interactive, with the purchase of the Fire-EMS Information Network in November 2002 from Illinois-based Cambert Ltd. The online portal was one of the first to serve the emergency services industry. It hosted thousands of home pages at no cost for EMS departments worldwide. Cygnus relaunched the network in December as the Firehouse Network and made it part of its highly successful Firehouse.com portal.

New periodicals added to Cygnus’s group of publications included VDV World, which was launched in September 2002 to serve the commercial voice, data, and video electrical contractor market. In May 2003, Cygnus acquired Finishing & Restoration magazine from Woodland Hills, California-based McCloskey Communications. The periodical became part of Cygnus’s Building and Home Products Group. With the acquisition, Cygnus published a total of 80 B2B media products, including trade magazines, directories, and card decks. The company also produced 47 trade shows serving 15 major markets. Including its Web sites, Cygnus boasted a portfolio of more than 200 separate media products reaching five million professionals annually. Its diversity in serving 15 different market combined with its presence in high-interest industries such as security, fire and rescue, emergency services, and construction helped the company maintain revenue growth in the midst of a general downturn in B2B advertising during 2002, 2003, and the foreseeable future.

Principal Divisions

Cygnus Publishing; Cygnus Expositions; Cygnus Custom Marketing; Cygnus Interactive.

Principal Competitors

Bobit Publishing Co.; Hanley-Wood, LLC; Lebhar-Friedman, Inc.; North American Publishing Co.; Penton Media, Inc.; Primedia Business Magazines & Media, Inc.; Randall Publishing Co.; Vance Publishing Corp.