November 6, 2015

Acquisitions can rescue floundering publications…or not

Last week, women's fashion and lifestyle magazine Lucky shuttered its production for good.

Last week, women's fashion and lifestyle magazine Lucky shuttered its production for good. The decision comes with a spate of layoffs and the demise of a well-known entity in the ladies' journal space. In post-mortems about Lucky's folding, analysts say the failure of acquisition efforts was the final nail in the not-so-lucky mag's coffin.

"The long, slow demise was an unsuccessful wait for a white knight, which could have been AOL," writes David Yi of Mashable. "[Sources say] that the company was still chugging along in hopes that it would attract a bigger media brand to sell to. One they were eyeing was AOL, which agreed to observe's traffic for a couple of months. When AOL decided to go in a different direction, Beachmint's CEO and co-founder Josh Berman finally pulled the last trigger this week."

For publishing companies, demonstrating traffic and consumer interest is a key step in securing an acquisition. Last month, this blog covered the $20 million acquisition of HelloGiggles by TIME Inc. While M&A activity in the lifestyle content creation space is healthy, Lucky couldn't keep up with the new standards for valuation in the eyes of acquirers.

The magazine once boasted more than 1.1 million followers, specifically young women without the income to buy into the Vogue fashion fantasy. By contrast, HelloGiggles sported 11 million unique viewers in September 2015. This shows that in a competitive web space, brands need unique and alluring content to remain attractive as acquisition targets.

With the guidance of an M&A advisor, your tech firm or startup can find, negotiate and sign a merger or acquisition deal that achieves your growth objectives. Contact us today to learn more about how working with an advisor can help your company reach the next level of expansion and success.