Ascend Media has sold the assets of its healthcare division on College
Road to Michael Hennessy & Associates Inc., a medical publishing firm
based at Princeton Meadows Office Center.
Some might view the unbundling of the healthcare division, which
failed to meet the goals of its Kansas-based investors, as a case of
greedy investors getting their comeuppance. “Be of value to your
audience first, and the profits come second,” they would say. “When
private equity is involved, the CEO gets squeezed for performance
beyond what may be good for the company.”
Others might point to how the market has gone soft for primary care
publications, which have seen their advertising levels fall.
But perhaps most interesting to Princeton observers is that Mike
Hennessy, a second-generation medical publisher, has brought into his
fold some distinguished titles with a family connection. He and his
brother, Jack Hennessy, each had their own medical publishing
businesses. The magazines Mike bought were previously owned by Jack,
who had sold them to Ascend.
John J. “Jack” Hennessy founded Medical World Communications in 1985.
Among the well-respected magazines he published were Pharmacy Times
(founded at the turn of the century) and American Journal of Managed
Care (one of the few free-circulation magazines included in important
indexes).
Jack Hennessy got into some legal problems regarding circulation
statistics, and in 1993 he took on a majority shareholder, Great Hill
Partners, using those funds to rapidly acquire other firms. In 2001 he
reported revenues of $100 million. He sold his company to Ascend Media
three years ago (U.S. 1, April 26, 2005).
Ascend Media was founded by former executives of publishing giant
Primedia. Their new business-to-business media company was their first
foray into the health industry. After acquiring Medical World in 2005.
Ascend Media had $150 million in revenue, and it published 50
magazines and journals in the medical and healthcare field.
“We were successful enough that we could be sold,” says Will Passano,
the former president of Ascend’s health division. “Intellisphere had a
lucky opportunity to buy two strong assets, Pharmacy Times and
American Journal of Managed Care.” Passano, the scion of a medical
publishing family in Baltimore, had expanded by moving Ascend’s 100
employees from Forsgate Drive to 18,800 square feet at 103 College
Road East (U.S. 1, June 28, 2006).
Now some of the magazines have suspended publication, five dental
magazines have been spun off, and just 27 employees remain. “We have
tried to find homes for as many people as possible,” says Herb Marek,
president of the new division of Michael Hennessy’s company. Soon they
will move to Hennessy’s headquarters on Plainsboro Road, where they
will occupy all of Building 300 and a series of suites in Building
400. “The College Road space has room for well over 80 people, and
this layout is too `closed’ for our liking – it does not fit in with
our culture. We like a much more open space where people can interact
and work with each other.”
Until Hennessy bought the Ascend magazines, the biggest company under
his umbrella was Intellisphere LLC, publisher of the MD Net Guide
series of journals, E-mail newsletters, and digital publications
(www.mdng.com). In 1999, when most doctors had only dial-up
connections to the Internet, he launched MD Net Guide to help doctors
find the websites, tools, and other resources that might help them
streamline their practice and offer better patient care. MD Net Guide
did the legwork for them, highlighting the best online professional
resources. Now Intellisphere has seven specialty-specific editions of
MD Net Guide for 200,000 physicians and specialists.
Hennessy also owns Arc Mesa, a medical education company in Monroe,
and Hospital Research Associates (HRA), a market research firm in
Parsippany.
Ever since Ascend Media went on a buying spree, some industry
observers had been predicting that Ascend would end up selling some
the purchases to pay debt. Before the sales, the medical/dental
division had revenues of $60 million, according to trade publication
FOLIO. Ascend is keeping four of its healthcare divisions, says
Kansas-based CEO Vicki Masseria, who stepped up to that job in
December.
Ascend’s newest dental magazine, Dental Product Shopper, had been spun
off to its creator, David Branch (www.dentalproductshopper.com). This
company is in transition, has no listed address or phone, and Branch
was not available by press time.
The remainder of the dental assets from Ascend Media went to Dan
Perkins, a long-time dental publisher who had been president of
Medical World Communications. When MWC was sold to Ascend, he and his
cohorts left to found a dental publications company, Aegis
Communications, in Newton, Pennsylvania. His flagship publication,
Inside Dentistry, gets a 12 percent market share of ad dollars, and
sells a full page ad for $8,300.
“It was a situation where we had the ability to do it,” Perkins says.
For 18 years Perkins had run the Compendium, and he and his team
launched the other titles that he bought. “We ran them, we launched
them, so our team has intimate knowledge of those publications,” says
Perkins. “We have a solid plan to bring them back to where they
belong.” He hired one Ascend employee from Ascend.
Perkins has plans for Contemporary Aesthetics and Contemporary Dental
Assisting, and he believes the new titles will double his firm’s net
worth. He also acquired Advanced Aesthetics & Interdisciplinary
Dentistry, Functional Esthetics & Restorative Dentistry, the Middle
East Journal of Oral Health, and Dentistry India.
Perkins says he has been offered private equity investment deals, such
as the one that Jack Hennessy took. He has nothing but praise for the
company from which he bought the magazines. But, looking at what has
happened to companies that took investment, is convinced that he
doesn’t want to go that route. “We are publishers, not bankers. We
love our marketplace. They don’t care about the marketplace. We are
proud to call ourselves dental geeks.”
