There can be little doubt that Dominic Bolton relishes his work. With 15 years' experience in the London corporate finance melting pot and an impressive track record advising on more than 50 completed transactions, he shows a healthy appetite for bringing his brand of down to earth advice to management teams and investors in the City.

Currently lead advisory partner in Grant Thornton's London corporate finance team, Bolton has rejoined the firm he trained at in the wake of the Grant Thornton/RSM Robson Rhodes tie-up. At the time, he was national head of corporate finance at RSM and had spent ten years at the firm.

For the past five years, Bolton has been making a name for himself in the publishing, business information and marketing sector. Beginning with the 2002 purchase of Puzzler Media by AAC, he's become a seasoned expert on the changes that have been taking place in publishing, providing corporate finance advice to the likes of Quantum and Ocean Media, cultivating an insider's view of the strategic ins and outs of a sector very much in flux.

'Like all good things in life, you tend to fall into them slightly by accident,' he says of his entrance into the publishing world. 'I happened to do a number of publishing-related deals, largely with private equity-based companies, in particular Puzzler Media.'

That deal was a seminal one for Bolton because it demonstrated that the right mix of editorial ideas, a strong brand and a management team that understood its market can provide private equity investors with a compelling story. What this and subsequent deals have demonstrated is that something we take for granted can translate into a business that can be leveraged into digital media, events and other brand extensions.

Diversify to survive

This potential to diversify has been born out of necessity. Advertising, and to some extent subscription revenues, have been eroded by the internet and even those businesses that have been successful in establishing online alternatives need robust plans and models to cope with driving revenues online. The last decade has seen a shift towards capitalising on editorial and publishing assets and deriving income from subscription lists, staging awards and conferences: a triple play of traditional print-based publishing, online and events.

The online revenues may still look uncertain - accounting for just 10% of total publishing revenues - but the flight from print to online remains a certainty, he says. With Reed putting its Reed Business Information print titles on sale last month, you can see his point. 'We've seen a huge amount of strategic change in the past six to seven years and with that some of the larger groups have decided to acquire more online or data-driven businesses and have been offloading traditional print.'

To say that Bolton finds the sector dynamic would be an understatement. 'There's a huge amount of strategic consolidation going on, which is driving the M&A activity.'

The UK publishing scene is also hugely fragmented with big players like Reed, UBM and Incisive Media (publisher of Accountancy Age and Best Practice), a small mid-tier and a plethora of smaller privately backed publishing houses. It's the latter group that need to make the right strategic choices in the months ahead.'

There are smaller to medium-sized publishers that are scratching their heads over what to do with their businesses. You've got the cycles in recruitment advertising, the double whammy of advertising genuinely migrating online. The problem is that it's all very well saying you're going to invest very heavily in online and subscription-based businesses, but you're replacing large volumes with smaller volumes albeit more high margin, which makes it more difficult to work your business. So the smaller to medium-sized businesses are increasingly rethinking their business model.'

The skills he's talking about are technical and marketing. It's one thing to build a website, it's another to make it revenue-generating. 'That's quite difficult for a more editorially based background compared to a software-based business,' he says.

Difficulties notwithstanding, until recently, publishing deals have been attracting quite high multiples, particularly if they occupy a potentially lucrative niche. 'You can get anywhere between seven and 20 times depending on the type of business and revenue stream. More pure data, online-driven with subscriptions-type models and you're at the top of that scale; more traditional recruitment advertising, display advertising and you'll be at the lower end of that scale.'

They are also relatively cash-generative businesses and traditionally quite high growth. 'There is a substantial amount you can do with brand and there are some good management teams and they have been able to get reasonable exits.'

The ones that do particularly well are those that lead their field. 'It's those that clearly dominate their niche. For instance, Puzzler Media is the market leader in the provision of information and magazines within the puzzle arena.

The grey market is a big reader, you have children and then you have more logic-based puzzles like sudoku, which is dominated by the 25- to 40-year-old sector.'

Professional management

Bolton puts the success of the deals he has been involved with down to the professionalism and quality of the management teams within the sector. 'The benefit I've had in terms of the management teams I've worked with that have attracted private equity is that they have come out the training grounds of the industry. And those that have attracted private equity are genuinely quite creative. Not so much in terms of the content, not so much in terms of what appears on the shelf. It's more down to strategic vision.'

These teams were allowed to investigate the new revenue streams, something that doesn't always happen under traditional publishing ownership models.

'A lot of management teams are just frustrated by their owners, who have not allowed them to do various things. Those who have been let loose into the private equity arena have actually attracted investment.'

Bolton says that the advantages and qualities the firm brings to this sector revolve around its expertise in the mid-market. 'That's how we differentiate ourselves from the big firms which just come in and dip in and dip out of the market depending on whether there's a downturn in larger deals - which there might be at the moment, so we'll see them being competitive in our space.'

The firm can also offer breadth. 'It's not just me as a corporate finance adviser, there's a fairly commercial tax guy, there's somebody who can value the business, there's someone who can offer strategic and commercial advice to that business. And it's all about being an independent. We don't run businesses and nor do we pretend to. We are there almost as an extension of that company to help them grow.'

He also argues that clients like the high level of contact. 'So a partner and a director and all our team will have involvement with the management team and owners of that business. You're getting relatively experienced people offering advice.'

Bolton is nothing if not an enthusiast and his own reading is suitably eclectic. He rates The Sun alongside the Financial Times as his daily staples. He reads all trade titles that come his way and is well-versed on the changing parentage of titles. He admires Monkey magazine for its online-only approach, but stresses that the content is not for him. From a similarly professional stand point, he's an admirer of Grazia and Good Housekeeping.

Consumer titles are being hit hard, he says and in a sector that continually refreshes itself, current new launches will struggle. With market dynamics like these, titles will undoubtedly continue to change hands and investors and management teams will continue to require his, and others', services.

www.grantthornton.co.uk

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