Congratulations to Pete Stevenson and the team at Latisys on the announced sale to Zayo

 Congratulations to Pete Stevenson and the team at Latisys on the announced sale to Zayo.

 Zayo Group Holdings Inc. agreed to buy Latisys Holdings LLC for $675 million, the telecom operator’s second-largest acquisition and its biggest move yet into data centers.
Zayo specializes in leasing so-called dark, or unused, fiber-optic cables to companies that want to expand their networks to cellphone towers and data centers such as those owned by Latisys. The deal would enable Zayo to sell more network bandwidth to Latisys’s enterprise customers while marketing its expanded data-center footprint to existing Zayo customers... More...

For more on Latisys, read the Colorado success stories article from Colorado Biz magazine

Congratulations to Woody Pastorius and the team at Mywedding.com on the sale to Meredith Corporation

DES MOINES, Iowa and NEW YORK, Nov. 17, 2014 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; www.meredith.com), the leading media and marketing company serving American women, announced today that it has agreed to purchase Mywedding.com, further extending Meredith's reach to millennial women and the Company's presence in the $53 billion American wedding marketplace.

Mywedding.com, one of the top five wedding websites in the U.S., provides couples with the complete wedding planning product suite. With free planning tools, inspiration-focused content and a search experience designed to connect couples with local, national and international wedding professionals and venues, mywedding.com empowers couples to create a wedding that perfectly encompasses their unique style and budget.  The site offers advertisers exposure and connection to motivated millennial consumers at a pivotal life stage.  

The purchase of mywedding.com follows Meredith's recently announced agreement with Martha Stewart Living Omnimedia (NYSE: MSO), which includes the operations of the popular Martha Stewart Weddings magazine and website. Martha Stewart Weddings is a leading bridal magazine on newsstands and also a top digital wedding destination. 

The combination creates one of the largest audiences in the wedding media marketplace.  It gives Meredith access to millennial consumers at the earliest stages of family formation, complementing existing Meredith brands such as Fitness, American Baby, Parents and Allrecipes.  It further solidifies Meredith's position as the nation's leading media company focused on home and family. 

"With its access to younger consumers at such an important time in their lives, strong local sales model, and digital expertise, mywedding.com is a valuable addition to our portfolio," said Meredith National Media Group President Tom Harty.  "We believe we can further grow mywedding.com's consumer audience, while at the same time developing the next generation of consumers for Meredith brands and creating new sales and marketing opportunities for our clients."

There are over 2 million weddings in the United States annually, according to the National Center for Health Statistics.  Three-quarters of couples use online resources to plan their weddings, and spending on weddings totaled more than $53 billion in 2013. 

"We continue to strengthen our focus on the most important milestones in the lives of our consumers, specifically marriage, home ownership and raising a family," said Meredith Chairman and CEO Steve Lacy.  "This acquisition augments our initiatives in the digital space, and is consistent with our Total Shareholder Return strategy to pursue investments that scale our business and increase shareholder value."

Said mywedding.com President and CEO Woody Pastorius, "Mywedding.com is designed to meet the ever-evolving needs of the millennial couple, and through customized content and marketing programs we have successfully created a digital environment that connects this audience with relevant local and national providers. Meredith is the perfect home for us, and we are delighted to join with them to grow the mywedding.com brand."

Mywedding.com is the latest in a series of acquisitions, launches and alliances for Meredith's National Media Group.  Last month, Meredith announced a 10-year licensing agreement with Martha Stewart Living Omnimedia (NYSE: MSO) to acquire the rights to Martha Stewart Living, Martha Stewart Weddings and www.marthastewart.com.  In November 2013, Meredith launched the award-winning Allrecipes magazine, which followed the acquisition of allrecipes.com in March 2012.  

Additionally, over the last three years, Meredith has acquired the Eating Well, Family Fun, Every Day with Rachael Ray, Parenting and Baby Talk brands.  In spring of 2015, Meredith plans to launch Parents Latina, an English-language magazine with a ratebase of 700,000 targeting millennial Hispanic moms.

Meredith has also been executing a strategy to expand its broadcast television footprint.  In the last year Meredith's Local Media Group has completed or announced the acquisition of television stations in Phoenix, St. Louis, Mobile-Pensacola and Springfield (Mass).

"We continue to look for strategic acquisitions, partnerships and investment opportunities like these to expand our reach and create additional shareholder value," said Meredith Chief Development Officer John Zieser. 

The acquisition of mywedding.com will not have a material effect on Meredith's fiscal 2015 second quarter financial performance.  Meredith will provide more detail when it reports its fiscal 2015 second quarter results in January 2015.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE: MDP; www.meredith.com) has been committed to service journalism for more than 110 years.  Today, Meredith uses multiple distribution platforms – including broadcast television, print, digital, mobile, tablets and video – to provide consumers with content they desire and to deliver the messages of its advertising and marketing partners.

Meredith's National Media Group reaches an audience of over 200 million monthly, including 100 million unduplicated women and 60 percent of American millennial women.  Meredith is the leader in creating content across media platforms in key consumer interest areas such as food, home, parenthood and health through well-known brands such as Better Homes and Gardens, Parents and Allrecipes.  The National Media Group features robust brand licensing activities, including over 3,000 SKUs of branded products at 4,000 Walmart stores across the U.S.  Meredith Xcelerated Marketing is a leader at developing and delivering custom content and customer relationship marketing programs for many of the world's top brands.

Meredith's Local Media Group includes 17 owned or operated television stations reaching more than 10 percent of U.S. households.  Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in the nation's Top 25 – including Atlanta, Phoenix and Portland – and 14 in Top 60 markets.

Meredith's balanced portfolio consistently generates substantial free cash flow, and Meredith is committed to growing Total Shareholder Return through dividend payments, share repurchases and strategic business investments.  Meredith's current annualized dividend of $1.73 per share yields approximately 4 percent.  Meredith has paid a dividend for 67 straight years and increased it for 21 consecutive years.

Get your Business Ready Before You Have to Sell

[Editor's note: Last year, six clients of The Mead Consulting Group successfully executed sales with transaction values of between $30M to $200M. We have helped over 30 clients add value, prepare for a sales transaction, and execute successful transactions. A number of economists are predicting that 2013 - 2015 will be the best years to transact a business over the next decade. - DPM]

You're ready. You want to reach for the phone to make that call to the investment banker, M&A adviser, or business broker to sell your company. Stop. Consider if you are really ready. A recent survey of investment bankers indicated that more than half of the companies presented for sale will not result in the seller realizing the desired price. For companies under $30 Million in revenue, over 85% are not ready. In fact, most business owners wait until an unfortunate event - health issue, untimely death, partner dispute, loss of very large customer, burnout, etc. before putting the company on the market.

There are financial, legal, regulatory, and management issues that need to be addressed before the company can be properly marketed. Some relatively short-term actions (120 days to one year) can add significant value to your business and increase your selling price:

1. Do you have a Growth Story? Put some excitement (not hype) into your business plan.

Is your future strategy a mere rehash of what you've done before? If it's not exciting to you, why would it be exciting to a prospective buyer? What would you be doing if you were buying the business? Develop a strategic plan that is realistic and can be executed. Be reasonable with your financial projections, but make a compelling case for the prospective buyer. Remember, that a buyer is interested in the FUTURE opportunities for the business, not your history.

2. Drive value - in the buyer's eyes

Many times what matters to a business owner may not be what drives value in the eyes of the buyer. Adding an acquisition or product line in an unrelated field may be interesting to you, but would not fit within the investment model for a prospective buyer. It is likely better to work on things that will drive additional value to your business than what could best be described as a "distraction."

3.  There are immediate profits hidden in your customer base. Focus on both your most profitable customers and your least profitable ones.

One-third of your customers are unprofitable? Think that isn't so at your company? Data from over a 1800 companies ranging in size from Fortune 500 to small and mid-size companies reveals that on average 30% of a company's customers are unprofitable when all costs related to acquiring and servicing a customer are allocated. These "bottom tier" customers typically lose between 40% to 200% of total company profits. That means that your efforts with profitable customers are constantly diluted by the bottom tier.

Customer profitability can be calculated in most companies using the existing software and information technology. There are proven methods for allocating costs to customers so that a profit per customer profile can be developed. Customers can then be segmented into Tier 1 (high dollar profits), Tier 2 (lower dollar profits or break-even), and Tier 3 (unprofitable). Once identified, actions can be taken with each group.

The thought of taking actions with unprofitable customers makes most business owners and CEOs' knees wobble. Managers initially fear that changes will result in lost customers and lost revenue. That simply is not the case. Companies find that turning unprofitable customers into profitable ones is not as difficult as one might think. Carefully identified and properly implemented changes typically result in very few customer defections. Most customers that like your products and services are not fast to change. Those that do leave actually result in an increase to overall profit. Since valuation of most companies is based on multiples of profit or cash flow, profit is much more important than revenue. A wholesale distribution company with $45 million in revenue found that by implementing relatively simple changes to pricing, packaging, and servicing, it reduced the number of unprofitable customers by 45% in 180 days, adding almost $700,000 annually to the bottom line. At a relatively modest multiple of 3 to 6 times EBITDA, these actions alone could add $2 to $4 million to the selling price.

Expanding business with your most profitable customers is the most direct way to increase revenue and profit. By examining the needs of your most profitable customers, you can unlock ways to develop incremental profitable growth. In difficult economic times, it is far easier to increase revenues with your best customers than it is to find and close new profitable customers. Have you asked your best customers how you can gain more of their business? A manufacturing firm with $100 million in sales learned that by adding project management services for its best three accounts, it was able to add an additional $10 million in revenue and almost $1 million in net profit in the first full year.

4. Are due diligence nightmares hanging over your business? Don't wait until you get ready to sell to clarify potential due diligence issues. Waiting will, at best, delay your sale and may result in a significantly lowered price. At worst, they can kill a deal. According to one Denver transaction attorney, "I have seen sale prices lowered by as much as 60% because of a surprise that comes up during the buyer's due diligence. It is far better for a seller to discover these in advance when they have the time to resolve them. A Denver investment banker recently described this situation: "A buyer almost walked away from a purchase because two weeks before scheduled closing, the seller could not produce the proper documentation on their corporate 'S election.' The seller, in order to get the buyer back to the table, ultimately had to agree to put millions of the selling proceeds into escrow to cover a potential tax liability. All because the seller didn't prepare in advance."

Begin to review such issues as:

·             Business entity organization, structure, and ownership

·             Ownership, protection, and use of Intellectual Property

·             Operating and financing contracts and transactions

·            "Auditable" financial statements 

              (Isolate closely held business expenses)

·             Pending litigation

·             Securities and Tax matters

·             Environmental or Other Regulatory issues

5. Get help selecting a "seller's representative" (investment banker or M&A Advisers).

The Mead Group has been involved with our clients buying and selling businesses in this region for 25 years. We have developed good working relationships with the best in class seller's representatives. We can help you to make an informed, educated decision that could make a significant difference not only in the final price, but also-and more importantly -how much you will be able to put in your pocket after taxes and selling expenses.

Start preparing NOW. It may be a 5 year journey!

The demographics of the "Baby Boomer Business Transition Bubble" make it critical that you begin preparing now so that you can sell in the next few years. Estimates for 2012 indicate that there are between 1.2 -1.5 million business owners in the U.S. (of businesses between $2M to $90M in revenue) that need to sell to provide liquidity for retirement. What most seller representatives do not tell you is that it may take you 5 or more years to leave the business - if you expect to maximize your value. This may include 1-2 years to properly prepare your business for sale, 6 months to one year to sell it, and then you may be asked by the buyer to stay on for 3 -5 years to run it. Financial buyers and many strategic buyers don't know your business as well as you do and frequently require managers to stay on to help run the business.

So, before you make the call to an investment banker to sell your business, take a critical look at your company and its current situation. Will you get the kind of price you want? Are there some short term steps that you can take that will add value? Spending some time improving business operations may enable you to reap real value within a relatively short time.

Contact us if you would like to discuss what the best performing companies are doing?