Two Custom-Publishing Powerhouses Join Forces

Source: STUART ELLIOTT | Media Decoder

Two companies that are leaders in the custom publishing industry – producing publications at the behest of marketers – are being combined under the aegis of a New York-based private equity firm.

The companies are McMurry, based in Phoenix, and TMG Custom Media, based in Washington and once known as the Magazine Group. They are merging in a transaction being overseen by the investment firm, the Wicks Group of Companies, which is taking a significant majority stake in the combined company, to be named McMurry/TMG.

Financial terms of the agreement have not been disclosed. The combined McMurry/TMG will have annual revenue of almost $100 million, Wicks said, and 270 employees. McMurry/TMG will be based in New York, where each of the two companies now has an office.

The deal to create McMurry/TMG is being formally announced on Monday morning, although details began leaking on Friday.

Chris McMurry, who had been chief executive at McMurry, and the founders of TMG Custom Media, Richard Creighton and Jane Ottenberg, will own minority interests in McMurry/TMG. They will be involved in the combined company, Wicks said. Their new posts or roles were not specified.

Custom publishing is a venerable industry, known in the past primarily for the creation and distribution of magazines on behalf of automakers, lodging chains and retailers. But it is being revitalized as part of a trend as advertisers increasingly become involved in the creation of content aimed at consumers, known as content marketing.

For instance, a food service marketer, US Foods, recently hired a custom publishing company, Imagination, to create a quarterly aimed at consumers, and at restaurant owners and operators, the traditional target audience for US Foods.

Not only are the advertisers that pay for the custom publications taking larger roles in the process, the publications are going beyond print into realms like digital, mobile, social media and video. For example, the US Foods quarterly, called Food Fanatics, has a Web site and a presence in social media and is also available as a PDF.

“We see a real shift going on from traditional advertising to a content-driven strategy,” Dan Kortick, managing partner at Wicks, said in a phone interview on Friday.

“It’s more about engagement than exposure,” Mr. Kortick said, as content marketing offers “real engagement with your customer base.”

Mr. Kortick acknowledged that his observation about engagement versus exposure came from Matthew Petersen, who had been president at TMG Custom Media. Mr. Petersen becomes chief executive at McMurry/TMG.

“We have reached out to a great number of the clients” of TMG Custom Media and McMurry, Mr. Petersen said on Friday, “and we are confident they will embrace the combined entity and the increased capabilities we bring to them.”

Clients of McMurry, which began in 1984, include CBS Television, part of the CBS Corporation; Ritz-Carlton, part of Marriott International; and United Parcel Service. Clients of TMG Custom Media, which dates to 1981, include CDW and WebMD.

Fred Petrovsky, who had been president at McMurry, is becoming chief operating officer at McMurry/TMG. Keith Sedlak, who had been senior vice president for client partnerships at TMG Custom Media, becomes chief revenue officer at the combined company.

The Jordan, Edmiston Group, which specializes in fields like media, represented TMG Custom Media and McMurry in the transaction. Wicks, which invests in companies in fields like media, information and education, was advised by AMR International.