Episode 38: Miriam Warren on International Mergers & Acquisitions

Miriam Warren is a Director at The Fisher Company, which provides international mergers and acquisition services for print and digital publishing media and technology sectors. Her eleven years in academic publishing give her a comprehensive knowledge of a publisher’s specific needs, from acquisition and peer review process through print and ebook production.

Miriam also served as President of the Board of Directors for PubWest for nearly six years. She joins the BookSmarts Podcast to discuss the process of The Fisher’s Company’s mergers and acquisitions and gives advice to publishers thinking about selling their company or acquiring an additional one.

Learn more about The Fisher Company at www.thefishercompany.com. Email them today for a free consultation! 

Transcript

Joshua Tallent 

This week on the BookSmarts Podcast, we’re chatting with Miriam Warren. Miriam is a director at The Fisher Company, which provides international mergers and acquisition services for print, and digital publishing media and technology sectors. Miriam, thanks for joining me today.

Miriam Warren 

Thanks for having me, Joshua.

Joshua Tallent 

So, I’d like to start up just a little bit talking about kind of your background, what is your background in publishing? Because you’ve been around the publishing industry for a long time, you’ve been very involved. So, what did you What have you done in the publishing world over your career? Sure.

Miriam Warren 

So, I’ve been in publishing for most of my life, really, as far as a professional career, mainly about 25 years. So, I have worked in trade publishing, academic publishing, I worked for Fisher books in nonfiction, a lot of health and medical titles, business strategy, I also worked at the University of Arizona press in the academic space for more than 10 years, really, mainly handling their production, and integrating with the distributor. And then I also worked at Western national parks Association as their publications manager, as far as managing the trail guides and other information about the parks that are sold to tourists. So I’ve been with the Fisher company now for about five years. And all of that background has definitely been a help, as each project is unique.

Joshua Tallent 

Yeah, I bet. So, tell us a little bit about what the Fisher Company does, and obviously, how that background comes into play.

Miriam Warren 

Sure. So, the Fisher company, our main purpose, as far as our services go, is we provide mergers and acquisitions services, in addition to business consulting. And for the most part, what we do is we help publishers who are ready to sell their companies, we help them find a buyer for their company.

Joshua Tallent 

And that obviously it happens a lot. There’s a lot of mergers that happened in the publishing world, and acquisitions, as we saw with Simon and Schuster not too long ago. So that’s a pretty interesting part of the industry when you think about how many publishers are founded over the years, and then need to find the next step and get the backing they need to move on to the next level. Or, in some ways, we get to the end of a career, someone starts the publishing company and then it gets to the end of their career, and they’re ready to move on and, and retire. What do you do next? I imagine that’s a really helpful part of keeping publishing running as an industry.

Miriam Warren 

It is, and there have, unfortunately, been a lot of kind of negative thoughts towards mergers and acquisitions in publishing that it’s fairly predatory. However, the majority of people we work with are people that are willing sellers. They’re not being hunted down, they’re not being taken advantage of. So these are companies that are looking to move on to another level or, as you said, looking to retire if it’s a an independent owner, which is often the case. And so we are in touch with as many publishers as we can, both in the US, North America, and internationally to find the best matches that we can.

Joshua Tallent 

That’s great. So tell us a little bit about how the mergers and acquisitions process works.

Miriam Warren 

When we start mergers and acquisitions with a new client, it’s often about three to four years before we actually work with them. It is a very long sales process. It can be even longer. There are clients that we’ve been speaking with and checking in with for up to 10 years, just every year, how’s it going? What do you need? Providing a little bit of guidance for their next steps. So when a company decides to sell, and they want us to represent them as their broker and as an advisor, what we do is we have several preliminary calls. We want to make sure that there’s a good understanding of, first of all, how we as The Fisher Company operate, and also how that specific publishing company is running, what their products are, what the audience is, and what their goals are in selling, whether it’s to raise more capital for getting the company to the next level, or if it’s really selling off a piece of it. There are a variety of reasons and I can’t stress enough that every single publishing company is unique. The more we get into this, the more it surprises me. But that’s what we keep finding. So, you know, several preliminary calls, making sure that there’s an understanding, obviously, we want to talk through valuations, so that there is a mutual agreement that this is how much we think your company is worth and this is what we believe we can get for you on the market. So from there, we will enter into an advisory services agreement. We generally charge a retainer in addition to a transaction fee. And these are all customized to the specific publisher as far as the revenues, the percentages, the profitability. Again, everything is unique. For smaller publishers that have lower revenues, we will enter into a consulting agreement to help them that way as far as making it more cost effective for the publisher. We don’t want them to lose all of their potential profit by paying us. That’s not helpful for anybody. So once we enter into an agreement with our client, we go through another data gathering period of time, and we put together a summary of the company so that we can present that to prospects. So we’ll put together kind of a one page overview of your history, what your strengths are, what your revenues are, what your facilities are on your staff and, obviously, what the acquisition benefits would be to a potential buyer. And from there, we review potential prospects with our clients. Unless we have permission to contact anybody and everybody we want, which is rare, we do not do that. This is in consultation with approval from the client. These are the buyers that we believe would be a good match and this is who we want to start with. From there, we begin speaking with potential prospects, sign nondisclosure agreements, make sure that everything is confidential, of course, and once we have further interest, we invite prospects into an online data room which is populated with marketing information, sales, financials, legal operations, copyrights, contracts, etc. A variety of files that the prospect will need to fulfill their due diligence. So after we have interest, and we’re into the data room, it really begins kind of a long cycle of Q&A between both the seller and a prospective buyer. Obviously, the buyer is going to have a lot of questions for the seller. The seller should also be asking questions of the buyer to ensure that the buyer is a good match for them. It can work both ways. We want it to be a win/win situation in every single occasion that we can. That process can take several weeks, it can take several months, and once we have enough information to a prospective buyer, and they are interested, then they will send over a letter of intent. It’s also called a heads of agreement, which outlines what their intent is to purchase the company, whether it’s a share sale or an asset sale, and then the financial details in the structure of the deal. And from then, it’s another period of due diligence through to working on closing documents and that can take anywhere from several weeks to several months before closing. After closing, we do still try and stay in touch with our clients. We want to make sure that they are receiving what they expected out of the deal and that everything is moving along well with transition. So a nutshell that is how the process works.

Joshua Tallent 

Yeah, that’s great. So talk to me a little bit about where things are going. The trends that you’re seeing in the M&A space in publishing what’s happening? We’re getting to this interesting point. We’ve had the pandemic, we’ve had other things that have happened, and we’ve even seen, kind of getting almost to the end of a generation, in some ways, in kind of how publishing is. People are getting to that point and starting to look for the next step. So, talk to me about what you’re seeing and any opportunities that you’re thinking. If someone’s in that space now, and they’re thinking about, I want to maybe sell or maybe I want to be looking to acquire, what should they be thinking about? Where are the trends happening right now.

Miriam Warren 

So, increasingly, and this has been building for several years, but increasingly, as publishing has become more digital as we’ve become more remote and able to speak with each other, international acquisitions have is continuing to rise. So even if your company is in the US, and potentially your titles are focused on the US, there may be a publisher from France, or from another country that’s interested in establishing a United States platform company. So that is, that is something that we really tried to keep in mind, as far as discussing with our clients, you know, is looking for similarities in in genres, and in formats, and, and in culture of the business is really important. So another trend that we are seeing is there’s a long period of due diligence up front before we are seeing offers presented to companies. So what we’re seeing, as far as that’s concerned, is that the buyers are specifically wanting to take more time and review files much more in depth prior to an offer than post offer. So then we’re also seeing that there’s less time between an offer and the closing, if possible. So we’re seeing that shift in the timeline, in the process. We are also seeing that more and more offers are made based on profitability levels versus revenue levels and that is a shift that that has been going on for a few years as well. I think it’s really, starting now, as we’re seeing this change in generations of publishing, we’re having more people come into the development and strategy positions that weren’t originally in publishing. So we’re seeing a little bit of a crackdown on really what the ROI is on purchasing a company and it’s really interesting to see. So we’re seeing some really original, and, again, unique offer structures that we haven’t seen before. Often there’s lower amounts on the down and then a higher earnout. And that’s just one example.

Joshua Tallent 

Yeah, that’s interesting. I think it’s interesting as well that the valuations are moving toward more about profitability levels and I’m wondering what that indicates, as far as the types of people who are purchasing publishing assets now, or kind of where the industry is headed.

Miriam Warren 

Right. And that’s also reflecting the change in wanting to have a lot of inventory on hand, whereas a few years ago, maybe 10 or 15 years ago, physical inventory held more value than it does today. The majority of distributors don’t want more than one to two years worth of stock. You’re investing in the profitability of the company and the actual, the IP more than the physical product than we were before.

Joshua Tallent 

That’s great. Well, Miriam, I appreciate your time. Let’s talk a little bit about how people can be in touch with you and what they what they need to be thinking about as far as next steps or what they should be looking for in the next couple of years in the M&A space. Well,

Miriam Warren 

There are a number of ways that you can reach out to us as a broker and also other brokers and consultants in the space. Like I said, this is a very long process so even if you’re not thinking about selling your company now, if you’re thinking about possibly selling in the next five years, it’s worth meeting with a consultant or an advisor, just to kind of get a heads up on where you’re at and what you might need to start working on. We’re seeing more and more publishers that have their contracts digitized because that is a requirement. We’re not shipping boxes of physical contracts around between sellers and prospects anymore. Everything needs to be archived digitally and available. If you’re a publisher that’s been around for a while, and you have some historical documents that need to be digitized, it’s great to go ahead and do that, if you haven’t already done that. Another piece that we see often is that the author contracts are not assignable to a new buyer. And so before you go into a selling process, you really want to get a handle on all of your author contracts and find out which ones will easily transfer. Those are a couple of items and there are plenty more. So again, reach out to advisors, consultants. Most of us really aren’t trying to pitch anything the first time we meet. I don’t like having to pitch somebody the first time I meet them. It’s better to just become acquainted with those of us that are in the industry and figure out who might be a personality match for you and who’s going to work best.

Joshua Tallent 

That’s great. Well, thank you for your time today, Miriam. I really appreciate it. We’ll put some links in the show notes where people can reach out to you directly and I appreciate you joining the BookSmarts Podcast today.

Miriam Warren 

Thank you so much.

Joshua Tallent 

That’s it for this episode of the BookSmarts Podcast. If you like what you’ve heard, please leave a review or rating in Apple podcasts or Spotify or wherever you listen to the podcast, and also please share the podcast with your colleagues. If you have topics, suggestions or feedback about the show, you can email me at joshua@firebrandtech.com. Thanks for joining me and getting smarter about your books.