Member profile: Bobit pursues aggressive M&A strategy to tailor portfolio
Jan. 23, 2013 – In the final weeks of 2012, Bobit Business Media announced a number of deals, including the purchases of Limoforsale.com and Auto Dealer Monthly LLC and the sale of Hot Rod & Restoration magazine. The deals, says Ty Bobit, president and CEO of the company, are part of the company’s new effort to become brand dominant only in certain successful niches and to sell off the rest. In a chat with ABM, Bobit explained more about his company’s strategy, offered his opinion on the current media M&A market and talked about revenue gains and targets.
ABM: Tell us about Bobit Business Media’s recent acquisitions. What was the strategy?
Ty Bobit: Our philosophy is not a new one, but it's one that has been talked about for the past several years: really focusing on areas where you have strength and where you have a bigger footprint. Some companies are like Hanley Wood, focused completely on building and construction. We are a little more diversified in different areas, but are trying to get more focused on key areas. The Limoforsale.com deal was a nice addition to our LCT brands. Limoforsale.com is an automated, used vehicle website, kind of like an AutoTrader.com, and our LCT brand -- we have magazines, we have websites, trade shows and conferences, and we also manage the National Limousine Association.
We're totally embedded in this market, and adding this used limousine site lays down a bigger footprint for us in the marketplace. Also, being a pure website, it was a nice acquisition. This coming year, we want to grow the digital side of the business.
ABM: What other areas are you trying to focus on?
Bobit: Our biggest area is what we call Fleet, and that's everything from car fleets to bus fleets to truck fleets to limousine fleets. If it moves on tires, then we really got it covered with the different brands that we offer.
We did an acquisition in May to get Heavy Duty Trucking, which covers 16 million vehicles in the trucking industry. Along with that, we have some side areas that are automotive in nature. One is the automotive aftermarket, and [the other is] on the dealer side, which is how Auto Dealer Monthly fits in. We already had a vertical magazine for car dealers, a very niche brand, and a number of conferences. The addition of Auto Dealer Monthly gives us more of a broad-ranged brand and that will help bring car dealers to our conferences that we put out.
ABM: In a recent article, you were quoted as saying, "“Our strategy has always been conservative growth, but we're getting a little more aggressive.” Can you explain more?
Bobit: Well, we don't have private equity behind us and all of that. We have done conservative growth -- we buy new properties out of the profits of the business, and it's served us well for 52 years. When I say we're being more aggressive, years ago we would have never sold a property like we did recently with Hot Rod & Restoration. We sold the property because we didn't think it would fit, and we brought in other brands because they did fit. Years ago, we just would've kept it going the way it was. So when I say we're being more aggressive, we're willing to go out and do more on the buy-sell side.
We think it's a good time too. The market has been depressed for the past few years. Multiples are not real high for print products. Although we are trying to build up the digital side of the business, print is still a pretty good area for us, for the more "low-tech" areas that we are involved in. So we're seeing there are some opportunities out there for acquisitions.
ABM: You've made a lot of recent acquisition, and so have many other ABM members. Do you feel that media M&A is ramping up?
Bobit: I don't know about ramping up, but there will be good opportunities out there. As profits come in -- I'm assuming that companies will be more profitable moving forward because business is decent out there -- it's going to cost more to acquire properties. So I think in 2013, there can be some good deals out there before prices possibly start increasing because of profits.
ABM: What is your strategy for 2013? What will you focus on?
Bobit: We keep focusing on the digital side of the business and also events. Print has been going well, we have a good handle internally on print, but we need to continue to educate our staff members on the digital side of the business. We've had growth years for the last five years on the digital side, but it's still not as a high of a percentage of the company as we'd like. We see events as being an important part of our company as well, and we keep looking for new opportunities there, whether start-up or acquisition. We're pretty much a three-pronged company, not unlike a lot of ABM members. It's print, it's online and it's events. All three are working well for us.
ABM: How much revenue from digital would you like to see?
Bobit: I think 20 percent would be a nice target for us. We've increased close to four points this past year in how much digital represents, so we're already in the double digits from a percentage standpoint. Events is somewhere between 15 and 20 percent of our total. Print still represents the bulk of our revenue. We're in "low-tech" markets as opposed to high-tech centric markets. Our advertisers still feel that print is still a very good way for them to reach their customers.
We really just want to do a very good job putting out high-quality products. There are some aspects of the digital side of the business that we'd like to explore, such as getting more involved in tablets, trying to figure out how to sell products online. But it's really just digital growth [in 2013], no matter what shape it takes.
By Elizabeth A. Reid