TechTarget Merges with Informa Tech

Informa PLC, a FTSE 50 UK Group company, announced a definitive agreement to combine Informa Tech’s digital business with Informa TechTarget .  The combined business will “create a leading global platform in B2B Data and Market Access, focused on helping vendors in enterprise technology and other markets accelerate revenue growth.”

The “New TechTarget” will be positioned as a “unique end-to-end solution provider across the go-to-market: from strategy, messaging and content development to in-market activation via brand, demand generation, purchase intent data and sales enablement,” declared the firms.  “The combination brings scale benefits, diversified revenue streams, and strategic expansion opportunities by expanding TechTarget’s current addressable market and enhancing the resilience of its business by increasing its presence in new markets and new buyer personas.”

Informa is contributing its Informa Tech digital business and $350 million in cash in exchange for 57% of the combined company.  The cash is to be paid to existing shareholders when the deal closes.  TechTarget’s shareholders will retain a 43% equity stake in the combined company, “allowing them to participate in the long-term value creation of the combined company.”

“Many of the B2B tech media brands in the proposed deal are well-known to B2B marketers.  Many of the brands go back decades and are no strangers to mergers and acquisitions.  Both Informa Tech and TechTarget used strategic acquisitions to build their portfolios of properties over the years,” wrote MarTech Editorial Director Mike Pastore .  “The Informa Tech portfolio includes media brands like Industry Dive, Information Week, Light Reading, and AI Business; research firms Omdia and Canalys ; and lead generation platform NetLine .  TechTarget’s portfolio includes more than 150 websites under the TechTarget umbrella; research firm Enterprise Strategy Group (ESG); and virtual events and video platform BrightTALK .”

“As the value of audience data increased and B2B marketers in the tech sector, in particular, emphasized buyer intent data, both TechTarget and Informa Tech responded accordingly,” continued Pastore.  “The impact of the deprecation of third-party cookies and the resulting thirst for first-party data is all over the proposed deal.  One of the challenges many media organizations face when it comes to first-party data is scale: They can’t generate anything comparable to the volume of third-party data.”

The firms forecast $45 million in total annual EBITDA synergies within three years of closing, with $25 million “cost savings generated through increased scale, improved productivity, product margin rationalization and efficiencies in real estate, software, systems, and corporate functions.”

Informa Tech businesses include:

• Omdia, the fourth largest technology research firm, and Canalys, “technology market analysts with a distinct channels focus.”
• Industry Dive , a line of specialist content sites for B2B decision makers.  Industry Dive offers 37 websites across vertical B2B markets.  Industry Drive publications reach 14 million readers.
• A portfolio of industry-leading digital media brands, including InformationWeek, Light Reading, Dark Reading, Network Computing and AI Business
• NetLine, an intent driven Lead Generation Platform.  Its INTENTIVE service offers “real-time insights into truly ‘who’ is actively expressing intent within a B2B account.” In June, I wrote that INTENTIVE is similar to TechTarget’s Priority Engine but broader in focus.  Whereas Priority Engine’s intent data is focused on enterprise and health tech, INTENTIVE supports a wider range of 247 industries, including pharma, aviation, manufacturing, technology, etc. “By design, TechTarget is highly focused on supporting the needs of B2B marketers and is targeting technology decision-makers.  They expanded to healthcare, but that’s about it,” noted SVP of Audience and Product David Fortino to GZ Consulting .  “We view our platform as persona-agnostic and diversified” due to the broader scope of Informa content and events. Fortino described TechTarget Priority Engine as a “phenomenal product” geared toward a more select audience of technology buyers.  As such, Priority Engine is “Apple-esque,” while INTENTIVE is the “Android alternative in the marketplace.” NetLine’s intent data is all “first-party-sourced data” and not cookie-based.  Furthermore, it is transparent and includes professional bios, job types, job levels, locations, and engagement activity.
• IIRIS, Informa Tech’s proprietary B2B data platform.  When combined with TechTarget’s B2B audiences, the combined offering will reach a B2B audience of around fifty million.

“We believe that the importance of permission-based audiences and first-party data is growing exponentially, and this combination positions New TechTarget to capitalize on these impactful trends by increasing our first-party intent signals, archive of original content, traffic footprint and size of our permission-based audience,” remarked TechTarget CEO Mike Cotoia .”

After the deal closes, New TechTarget will support over 220 specialist B2B content sites and brands.  Tech Research brands will include Omdia, Canalys, and Enterprise Strategy Group.

“The addition of Informa Tech’s digital businesses has the ability to accelerate TechTarget’s strategic roadmap by allowing it to continue to innovate leading products, offer customers end-to-end solutions…grow profitably, and create a platform to complete meaningful strategic acquisitions,” said Greg Strakosch , Executive Chairman and Co-Founder of TechTarget.  “Following a robust evaluation by the Board of Directors of strategic alternatives focused on enhancing shareholder value, the Board unanimously believes the proposed transaction is highly attractive to our shareholders, providing immediate cash value as well as the opportunity to continue to participate in the long-term value-creation of a larger, more diversified and stronger combined company.”

TechTarget, based in Newton, MA, is a sales and marketing specialist for technology companies.  Initially, it focused on enterprise tech but has been expanding down-market to a broader set of startups and funded companies.  TechTarget maintains 150 leading enterprise and health tech websites that fuel its second-party intent datasets.  TechTarget also gathers intent data from BrightTALK, its virtual event service for live and hosted content, and Xtelligent Healthcare , a set of healthcare and HealthTech websites.

Another element of its strategy has been shifting clients from its volatile marketing services to more stable subscription services such as Priority Engine.  Priority Engine is a high-end technology sales intelligence platform that leverages TechTarget’s intelligence and contact data.  Recent enhancements include prospect-level intent, IntentMail AI, and Salesforce connector enhancements.

IntentMail AI combines prospect-level intent with recent solution-specific company insights and the vendor’s “differentiated value.”  Thus, the message is personalized to individual buyers, their roles, and their research interests just as they conduct research.

IntentMail AI is the first release of TechTarget Personalize Assist, a suite of new functionality for go-to-market teams at enterprise tech companies.  Personalize Assist will improve message relevance while decreasing the time spent crafting messages.

New TechTarget anticipates “significant revenue synergies” from cross-selling TechTarget’s product suite, including Priority Engine, BrightTALK, and Content to Close programs, to Informa Tech customers.  Furthermore, expanded intent data gathered from Informa Tech’s digital brands “will improve TechTarget’s intent offerings” and “accelerate revenue growth.”

Priority Engine Express serves the SMB market.

New TechTarget will serve 8,600 customers across twenty countries, with a “larger research scope and greater access to first-party purchase intent data from Informa Tech’s leading portfolio of specialist digital brands.”  The expanded geographic and vertical scope “increases the resilience of the business by increasing its presence in new markets and adding additional buyer personas.”

The merger offers an expanded TAM, with new TechTarget enjoying a 10x TAM expansion “across 200,000 global customers across technology-enabled verticals, many of which are in earlier stages of modernization and digitization of go-to-market strategies and workflows than TechTarget’s existing verticals.”

New TechTarget will launch with an exclusive license to IIRIS first-party purchase intent data from Informa’s technology events, including Black Hat, Enterprise Connect, Data Center World, Channels Partner Expo, and Canalys Forums.

New TechTarget will accelerate expansion into new segments and technologies.  Similar to TechTarget’s acquisition of Xtelligent, which opened up the Healthcare sector, New TechTarget will look to expand into Retail, Banking, Legal, Manufacturing, Utilities, or other segments, supported by Industry Dive publications.

Furthermore, New TechTarget will have an “enhanced capacity to complete value-focused acquisitions that can build on its leading platform.”

The combination roughly doubles the size of each firm, with Informa Tech assets generating approximately $275 million in 2024 and TechTarget expected to announce $230 million in 2023 revenue.

“New TechTarget’s operating plan forecasts double-digit organic revenue growth, more than 50% revenue under long-term contracts, and attractive operating leverage with at least 50% incremental Adjusted EBITDA margins, 35%+ Adjusted EBITDA margins within three years of closing and consistent, strong free cash flow,” stated the merger announcement.  “Through a combination of organic and inorganic growth, the ambition is for New TechTarget to generate $1 billion in annual revenue within five years of closing.”

Furthermore, the expanded company scope will better position the firm to launch new AI products across a growing customer base.

New TechTarget will retain its Newton, MA headquarters, with offices in London, Munich, New York, Paris, Singapore, and Sydney.  TechTarget CEO Michael Cotoia will transition into a Special Advisor to the CEO role focused on managing the transition post-close.  Gary Nugent , Informa Tech CEO, will relocate to Newton and manage the new company.

New TechTarget will continue to be listed on the NASDAQ under the $TTGT ticker and classified as a controlled company.  The new Board will consist of three current TechTarget directors and five Informa directors, including Nugent.  A new Chairman will be appointed.

“Today, we significantly strengthen Informa’s position in the growing B2B Digital Services market, creating a platform to serve B2B customers at scale digitally, as we already do in Live & On-Demand B2B Events,” said Stephen Carter, Informa PLC Group Chief Executive.  “Over the last three years, Informa has built a proprietary first-party data platform, IIRIS, and expanded our position in the B2B Digital Services market.  Now, through a majority shareholding in US-listed TechTarget, we are positioning this business firmly where the customers and the value are.”

Both boards have approved the transaction and expect to close the merger in H2 following standard regulatory and TechTarget shareholder approvals.

TechTarget expects to report revenue of approximately $230 million and Adjusted EBITDA of about $70 million for the year ending December 31, 2023.  The Q4 earnings will be released on February 7.

Additional Resources

• TechTarget: Website | Priority Engine Product Page
• GZ Consulting: TechTarget | Priority Engine | BrightTALK | Xtelligent HealthCare Media | Enterprise Strategy Group | NetLine | Totem
• Merger: Press Release | Deal Facts | FAQ | 8-K | Investor Presentation