F+W Media Acquires New Track Media
Diversified enthusiast media company F+W Media has acquired New Track Media in an all-cash deal deal that will increase company revenues by 40%, F+W announced today in a statement. The deal was funded by operating cash flow and new debt raised by F+W; the specific financial terms of the deal were not disclosed.
Cincinnati-based New Track operates 30 craft, woodworking and astronomy brands, publishing magazines, online media and books. New York-based F+W, which owns and operates Digital Book World, operates in 21 verticals across five market segments — including arts and crafts, outdoors and writing and design — and has several complimentary brands.
“New Track is probably the second largest art and craft content and media company in the country,” said F+W Media chairman and CEO David Nussbaum, adding that he believes New Track is a good fit for F+W because of the many complimentary market segments in which the companies operate.
New Track brands like Keepsake Quilting, Sew News and American Woodworker will now live alongside such F+W brands as Quilting Daily, Sew Daily and Popular Woodworking.
“Most of the brands are fairly synergistic,” said Nussbaum. The only directly competitive brand being absorbed is American Woodworker. When it comes to deciding how each brand will be integrated into F+W, Nussbaum said, “We’ll be evaluating each business but we’re buying the company because we believe in the brands and the business model.”
New Track is similar to F+W in that it is invested in vertical communities of interest and surrounds those communities with a variety of media products and e-commerce opportunities. F+W, however, has a much larger and streamlined e-commerce business and will be applying its infrastructure in that area to the New Track acquisition. New Track has a large catalog business with more than 12 million members, which Nussbaum believes will help F+W continue to build its large direct-to-consumer sales business.
In 2013, F+W sold products and services directly to 20 million consumers, generating tens of millions of dollars in revenue, making it perhaps the largest direct-to-consumer sales operation owned by a book publisher.
According to the F+W statement, there are 66 million American households with someone who enjoys arts and crafts as a hobby and that they spend about $31 billion a year doing so.
“About 10% of a hobbyists purchases — in dollars — go to content, usually books, and 90% go to the products and services around that hobby,” said Nussbaum. “We want to play in the 90% pool in addition to the 10% pool.”
F+W has been acquisitive in the past several years, most notably buying Interweave, another arts and crafts brand last year. Interweave was a similarly diversified media company with significant businesses in the knitting and sewing verticals. Nussbaum gave no indication that the company was going to slow down any time soon.
“We have to integrate the business and get it running smoothly and that takes a bit of time but I think we’ll still be looking to grow both organicly and by acquisitions,” he said.
Adding New Track’s 250 employees to F+W payroll will swell headcount at the company to about 1,000. While F+W announced that the acquisition will increase annual company revenues by 40%, it did not share specific figures.