Americans love their hobbies, and private equity firms are taking note. The latest firms to take advantage of American’s love of crafts are Chicago-based Frontenac Co. and New York-based Catalyst Investors LP. Earlier this month, the two firms announced they had teamed up to complete the acquisition of Interweave Press Inc., a publisher of books and magazines for crafts enthusiasts.
Interweave was the first acquisition to be woven into Aspire Media LLC, a newly formed platform company backed by the two buyout shops and headed by Clay Hall, a 25-year veteran in the magazine publishing arena. Aspire is geared to acquire consumer enthusiast media businesses and has received a total of $40 million in commitments from the aforementioned parties to do so. Interweave’s offices in Loveland, Colo. will also double as Aspire’s headquarters. Frontenac, Aspire’s majority owner, was introduced to Hall about 18 months ago and has been eyeing potential targets in this marketplace for the past year.
“The crafts publishing sector is a very interesting place to invest and it’s become a strategic priority of ours because of its vibrant and fragmented nature,” Frontenac Managing Director Walter Florence told Buyouts.
Though this was an all-equity transaction, Florence noted that Frontenac and Catalyst are currently holding discussions with a lender and are willing to refinance the company when the time comes to make a subsequent acquisition.
Interweave, which was founded in 1975 by Linda Ligon, publishes a half-dozen arts and crafts magazines such as Interweave Knits, Beadwork and Spin-off, and has more than 150 craft book titles in print. The company also puts out a number of other special interest publications like Stringing, Beadshow and KnitScape, and operates one craft oriented Website. Of the company’s subscription-based titles, many have the No. 1 or No. 2 market share, Florence said.
Ligon, who until now was Interweave’s CEO, will remain with the company as a creative director. Marilyn Murphy will continue as President. Natural Home & Garden, a wholly owned subsidiary of Interweave, was not included in this transaction, nor was Readymade magazine, which is partially owned by Interweave.
Aspire’s overall strategy is to acquire already-strong enthusiast magazine titles and expand their franchises through add-on acquisitions and the development of related directories, Websites, affinity clubs, database marketing, television programming and events. “We’re in ongoing discussions with other perspective sellers and have a number of initiatives in the pipeline for Interweave,” Florence said, declining to get any more specific.
But as far particular sectors in the hobby industry are concerned, the crafts niche will likely be a make up a large portion of Aspire’s repertoire. “It’s huge. Crafts is probably second largest market-share holder after automotive publications,” Florence noted.
And while Frontenac and Catalyst are busy on the publication side of the hobby market, a plethora of other private equity firms have recently been getting into the supply and accessory side of the industry. Among them, Sorenson Capital, just last month, announced an investment in craft hobby stores operator Provo Craft & Novelty, just days after Advent International acquired a scrapbooking products reseller, Making Memories, in a secondary transaction from Peterson Partners.
Other private equity firms that are players in the hobby market include FdG Associates, J.W. Childs Associates, North Castle Partners, Sentinel Capital Partners and Tarrant Venture Partners. And back on the print side of the sector, Apprise Media LLC, which receives financial backing from Spectrum Equity Investors, acquired Beckett Publications, a publisher of sports and entertainment market collectible guides, in February this year.