Media Investments Loom Large
Media companies were also popular with private equity firms. Hispania Capital Partners, based in Chicago, purchased two media companies through Hispanic Yellow Pages of America (HYPA), which it formed in 2004 with several Hispanic publishers. HYPA purchased Travel Media Northwest Inc. and Hispanic Impact Media Inc. for undisclosed prices. HYPA, which publishes Spanish yellow page directories in Illinois, Colorado, Arizona, and Nevada, is expected to reach around one million Hispanic households with this purchase.
"In order to provide a comprehensive Spanish yellow pages to the residents of the Northwest region, we needed Hispania as a partner to help attain our goals," says Sri Naidu, president Media.
Here is a look at other significant media deals:
• ACON Investments, a Washington, D.C. private equity firm, expanded its media and publishing holdings through ImpreMedia LLP. In 2007, Impremedia purchased the Tribune Co.'s Hoy publication and its weekend publication, Fin de Semana, along with Rumbo, the leading Spanish-language newspaper network in Texas. Rumbo has newspapers in three of the nation's top 10 Hispanic markets: Houston, San Antonio, and the Rio Grande Valley.
• Rumbo, which first started publishing in July 2004, has struggled despite praise for its product. The paper published five times a week in Houston and San Antonio before dropping to - once a week in January of 2007. Rumbo was already publishing once a week in the Rio Grande Valley.
• "Acquiring Rumbo's network of newspapers in Texas expands ImpreMedia's national footprint to seven of the top 10 Hispanic markets," said Erich Linker, senior vice-president of sales for ImpreMedia. "This allows ImpreMedia to provide advertisers a larger, national platform to present their brand messages while building sales volume locally."
• Before the Impremedia purchase, Rumbo was published by Meximerica Media, which is backed by Pinto America Growth Fund LP and Rustic Canyon Partners. The two private equity funds invested $18 million in Meximerica Media in 2005 to complete the building of what was then four daily Rumbo editions, including one in Austin that has since ceased publication, and to publish elsewhere.
• Two other Hispanic-owned media companies also announced new rounds of financing in 2007. Batanga, a Miami media and entertainment company, raised $30 million from Tudor Ventures and H.I.G. Ventures. The funds will be used to expand Batanga's marketing efforts and develop social media product and online content catering to the bicultural Latino consumer, says Rafael Urbina, chairman and CEO.
• Movida Communications Inc., a provider of prepaid wireless services to Hispanic consumers, received commitments of $40 million in funds and trade financing from Plainfield Asset Management LLC and The Cisneros Group of Companies, one of the largest privately held media, entertainment, technology, and consumer products companies in the world.
Money for Marketing
PR Newswire announced the acquisition of three Hispanic marketing companies in early 2007. Manny Ruiz, president and co-founder of the Miami-based Hispanic PR Wire, LatinClips, and Hispanic Digital Network, says the purchase by PR Newswire will give it the resources needed to communicate with the fast-growing Hispanic market.
"The tangible benefits of this partnership will be immediately evident to our clients in the form of 24/7 hours of operation, expanded product offerings and soon-to-be launched new communications services," he says. Another Hispanic-owned marketing firm, Latin Force LLC, merged with Geoscape International Inc. in June to create Latin Force Group, due to the backing of Goldman Sachs Urban Investment Group. The merger of Latin Force with Geoscape International Inc., a preeminent multicultural consumer intelligence and data analytics company, creates a leader in "integrated marketing services targeting the U.S. Hispanic consumer," says David J. Perez, Latin Force CEO. Latin Force Group provides integrated marketing services for more than 25% of Fortune 100 companies. Hercules Technology Growth Capital Inc., which provides growth capital in the form of venture debt (investment in the form of debt rather than equity) and equity to technology and life science companies, had a busy year, with an IPO that raised $108 million. Directed by CEO and chairman Manuel A. Hernandez, who co-founded the company in 2003, Hercules is a NASDAQ-traded firm that primarily finances privately-held companies backed by leading venture capital and private equity firms. Three companies in the Hercules portfolio held IPOs of their own in 2007 and at least six Hercules portfolio companies were acquired by other companies; AT&T spent $121 million to purchase Interwise, a global provider of voice, Web, and video conferencing services to businesses, and EchoStar spent $380 million to buy Sling Media, Inc., a digital lifestyle company offering consumer services and products. Hercules Technology continued to provide venture debt to an array of companies in the technology and life science sectors, including:
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