By John McGovern, CEO Grimes McGovern Associates
What drove Smooth Creative Holdings to buy online events and digital media company Energy Central?
At Grimes, McGovern & Associates (GMA), we recently sold Energy Central’s digital events, media and job listings business to Smooth Creative Holdings. Back in 2017, we also sold Energy Central’s live events business to Informa.
To understand the mind of the media buyer, we sat down with Josh Kaplan, Smooth Creative Holdings CEO, to find out why he decided to pull the trigger.
Who is Josh Kaplan?
Josh, an early employee at Morning Brew, explained to us the value he saw in Energy Central. He then gave us his insights into the unique qualities of B2B media businesses in general.
Josh got his start at Morning Brew with a couple of college friends. “We started Morning Brew for college students,” he said. “Who knew all of these other people would be interested?” The digital media company eventually added a variety of verticals and sold for $75m in 2020.
He and the other Morning Brew founders then started Smooth Creative Holdings, with the aim of building a portfolio of B2B digital media. They also launched an agency that represents business content creators to brands.
Why trade publications are valuable
Based on the success and learnings from Morning Brew, Smooth Creative Holdings looked for trade publications to acquire. In the founders’ experience, they provide a great value proposition for their respective industries. B2B media companies have access to a premium and owned audience, decision makers, active relationships with top brands (advertisers) – and they have a great email database.
Interestingly, Josh mentioned that the email database (not website viewership) is the key piece of the pie. Having good, working emails of thousands of active users in an industry enables better communication and deepens the relationship. B2B media generates trust in their readers, and it’s then easier to add new (paid) offerings or introduce them to new suppliers.
Enter Energy Central – GMA client
Enter Energy Central, a GMA Client. With a 30-year legacy in place, owners Steve and Audra Drazga were looking for a buyer.
Josh said: “Energy Central had all of the things we were looking for in a B2B media company. It’s a growth industry recruiting new talent and more dollars. Plus, it’s not boring. The energy industry is constantly undergoing change – so updated, interesting content generation and news are readily available.
“B2B is not a numbers game”
“B2B is not a numbers game [unlike consumer-facing media]. There is a ton of value in B2B as a trusted voice that can positively impact buying decisions. We take those trusted relationships and provide education and make recommendations on good products and services to purchase.”
What were the goals for buying Energy Central?
There were multiple goals for buying Energy Central. Smooth Media Holdings wanted to modernise brands and expand digital offerings into new formats like LinkedIn, YouTube, online webinars and virtual events. The company also wanted to expand the audience – while still “respecting and including your pre-existing audience.” Josh mentioned that the team are exploring the possibility of launching physical events in the future.
Josh credited the Drazgas for building a strong community and making the transition as smooth as possible. At the end of the conversation, he concluded that if a B2B media company does it right – if they capture attention, build trust, become a habit and work with the best companies in that industry – their exit opportunities could be very attractive indeed.
Grimes, McGovern & Associates, a leading lower middle-market Mergers & Acquisitions firm advising media, events and information services businesses globally. See our transactions here.
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