Schroder U.S. Makes Media Play –

Climbing back into the ring after an eight-month lull, Schroder Ventures U.S. Fund has agreed to acquire Armed Forces Communications dba Market Place Media (MPM) for $28 million. In a deal scheduled to close July 15, Schroder will purchase MPM from publicly traded CTN Media Group, more readily known as the College Television Network, which acquired MPM in 1999. Schroder plans to finance the deal with $15 million to $17 million in equity and debt from Antares and Heller Financial.

MPM is a media placement and promotions company that targets specialized markets, currently including the minority and college markets, as well as the military market. Its services allow a company that wants to target its advertising to one of these markets to deal only with MPM, which already has relationships established all over the country, instead of contacting individual newspapers or cable channels at different colleges or in numerous cities. This system lets the advertiser get one invoice and one insertion order, as opposed to thousands.

MPM had revenue of approximately $48 million in 2000. CTN acquired the company two years ago, planning to integrate the two companies’ efforts. However, CTN never got around to doing so, and the company ended up in want of attention from its parent.

Under Schroder’s ownership, MPM will look for acquisitions of companies like itself – providing similar services to different markets, said Monty Yort, a partner at Schroder Ventures. Those markets could include the senior market and the alternative lifestyles market, both of which are fragmented, like the three markets MPM already targets, he added.

MPM began its efforts in 1987, targeting the military market. It soon moved into the minority market and later into colleges, realizing it could cross-sell the different markets to the same customers.

The significance of these three markets lies in the fact that they are stable and highly fragmented in terms of forms of media.

Stability is a major issue, especially now, a time when the overall advertising sector is slowing down with the economy.

MPM historically has been growing at a rate of around 20% per year, and Yort said that will continue to be the goal.

“We will be able to provide MPM with a greater focus, with whatever capital it needs to continue to expand the business, as well as the support it needs,” Yort said. “This is a good investment for us in an environment that’s rather difficult in which to identify acquisition opportunities.”

Schroder’s U.S. fund, which closed in 1999, has a broad investment mandate, but primarily focuses on media, communications, technology, services and other growth sectors in the U.S.

No Mimic of Memec

Schroder Ventures U.S. Fund closed its last deal in the fourth quarter of 2000. It acquired the Memec group of companies for approximately $1 billion from Veba Electronics Group, a subsidiary of German energy company E.ON AG (Buyouts Aug. 14, 2000, p. 6).