We’ve sold Mumbrella

Mumbrella co-founder Tim Burrowes reveals that Mumbrella has a new owner.

So we’ve sold Mumbrella.

Let’s not use the weasel words you sometimes see used by companies that get bought. I’m not going to use terms like “releasing a strategic stake”. We’ve sold the company. We signed the paperwork this morning.

The new owner of Mumbrella – and our new boss – is a family-owned American company you probably haven’t heard of called Diversified Communications.

It’s a deal that guarantees Mumbrella remains an independent voice and in time, I hope, will give Mumbrella the opportunity to become a global brand.

In the short – and indeed medium – term, very little will change. The same team will still produce Mumbrella, from the same office. No new editorial oversight will be placed over what we publish.

My contract means I’ll be here until beyond the end of the decade, and the same goes for my fellow shareholder in the business, and our CEO, Martin Lane.

And it’s also not one of those deals justified by “synergies”. Nobody will lose their job as a result.

I must confess, when the moment came, I thought I’d feel more reluctance about this deal than I do. I’m glad to say, this feels right, both in timing and in owner.

And while I’ve loved the Mumbrella journey, and still do, being the owner has never really been what it’s about for me. Building stuff and writing about the media industry have always been what has motivated me.

I got as much of a kick – and worked just as hard – when I was launching the Media360 conference (does the name seem familiar?) and relaunching Media Week magazine for Quantum Media in the UK.

Or indeed when I launched the Middle East edition of Campaign magazine for ITP in Dubai. And again with the creation of the B&T Awards as a mass audience event for Reed Business Information.

So owning my own company has never been as important to me as having bosses who will trust me to get on with stuff.

As you might have seen, we’ve been able to do this deal at a time when we’ve had a great deal of financial momentum.

As I mentioned a few days ago in my article on Mumbrella’s ninth birthday, the last financial year saw us break through the million dollar profit, and $7m turnover mark. And we’re on target for further growth this year.

So what led to the sale?

Again, I’m not going to offer the usual spin that it’s only about future growth. It was also about getting a good, fair price. Just as it is for anybody else who sells.

This move into decent profit – after years of breaking even or making small losses – probably helped focus our minds.

In the years we’ve been going, as owners we’d never paid ourselves a real dividend, choosing to always reinvest in growing the company.

Which has been okay for Martin and I – we were also involved in the day-to-day, and getting salaries as employees.

But for our third equal shareholder, Ian Wakeling, who gave Mumbrella an office to launch from, loaned the business money when we needed it and put up a property to guarantee us an overdraft facility – it was a slightly different situation. He wasn’t working in the business, so wasn’t taking a salary.

He’s been a very patient man, but the time had come for him to see a return.

At the same time, having a decently profitable company meant that we were negotiating from a position of strength.

So we began a process. We were open minded about what a deal looked like, including whether Martin and I would keep all or some of our own shares in the business when Ian was bought out.

We ran a competitive process, and created a lengthy information memorandum document. Then Martin and I did management presentations to enough companies that I’ve lost count, from Australia, the US, the UK and Asia.

I’ve learned a lot about how businesses are valued and sold which will be tremendously useful when I wear my my journalist hat to write about mergers and acquisitions in the future. And as we raced to finalise this deal by the end of the year, I’ve learned to be slightly less cynical about those announcements that seemingly get sneaked out on quiet news days. Sometimes you really do go down to the wire.

The three things that we insisted on from the beginning were that our editorial freedom would be guaranteed, that all staff jobs would be safe, and that it would be with a partner who could help Mumbrella grow faster.

A number of potential suitors from the traditional media world dropped out around that point in the process, correctly recognising that if they were to own Mumbrella, the perception (and possibly the reality) of our independence would be harmed.

From there, a number of organisations made us indicative offers, with each offer structured in a different way. Some of those offers were from the events world, recognising not only the success of Mumbrella360 as a flagship event, but the potential to grow it further. Some were bottom feeders and some were serious.

It was good fortune for us that during the process, Mumbrella360 won conference of the year again at the Australian Event Awards. (The next time someone asks me to justify the relevance of entering and winning awards, the importance of third-party credibility will be high on my list of reasons.)

In truth, by the time we entered due diligence a few months ago (this stuff takes a surprisingly long time), Diversified Communications had emerged in our minds as a front runner.

The structure of the deal they offered us was simple, and fair.

But it was also attractive to work for a multi-generation family company that is interested in building for the long term, not cutting to hit the next quarter’s profits. It reminds me a little of Heseltine’s Haymarket in the UK, or even Yaffa’s AdNews in Australia, come to that.

Although these days, Diversified Communications is mainly an exhibition and conferences company – with an ambition, I gather, to widen its offering – its heritage is in media. Nearly 70 year ago, the company began life in the Maine, in the USA, in the radio, and then TV, business.

But Diversified has also been in Australia for the past 17 years, where it’s a player in the business trade shows space. It has offices in Sydney and Melbourne.

As the courting intensified, Martin and I spent more time with Diversified’s bosses in Melbourne and Sydney, David Longman and Kieron Haycock.

It’s always bugged Martin and I that we’ve never really known how to grow the exhibition part of Mumbrella360. Given that there’s no real competitor, it should be much bigger than it is. And thanks to the local brains at Diversified, I’m confident it will be in the future.

This year, by the way, Mumbrella360 generated more than a million dollars in ticket sales and nearly the same again in sponsorship revenue. The Mumbrella business model is these days in large part that of an events company.

And in keeping with our own ambitions for Mumbrella, it’s interesting to note that Diversified is in the US and the UK as well.

One of the slightly disappointing things to you as a reader, I suspect, may be that the terms of the sale are confidential, so I can’t tell you exactly how much we got.

I’d describe it as a good price. But also one that won’t see us wanting to take an early retirement.

At the same time, in the future, I’ll be doing this because I want to, not because I have to.

To have got to this point, we owe a lot of people our thanks.

It’s unfair to pick out any of our existing team in this article, without picking out them all, so I won’t. And of course, I find myself thinking of the many former staff who helped us get there in the first place. Many, many helped us along the way.

We’ve also always been very fortunate that the industry has supported us, through advertising and sponsorship, and equally as important, through reading and commenting. We’ve had a lot of friends along the way.

I’m not bothered about not being my own boss any more. In truth, I never was. Nobody really is. There were always my fellow shareholders – and even more importantly, our audience – to answer to.

But I do recognise a sneaking sense of relief. When you employ 33 people, as we do now, you don’t have the freedom to just walk away without messing up a lot of people’s lives. There were times where that made me feel a little trapped.

And times when running the business made me feel like I was being pulled away from the reasons why I did it in the first place.

So the lifting of that sense of moral obligation is a relief, even if it’s now been replaced by a new one of determination to help ensure the new owners will be glad they invested.

For now though, it’s business as usual. Over the next few months I’ll be flying back and forth between Sydney and Singapore as we prepare for a second Mumbrella360 in Asia. I’ll be working alongside our head of event content Damian Francis as he curates his first Mumbrella 360 here in Australia. Plus, I’ll be spending a little more time with The Source.

Meanwhile, soon we’ll be starting the interview process for an international editor, based in NY or London (drop me a line…).

Selling is certainly not the end, but it is the start of the next stage.




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