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FROM THE FRONTLINES :: JEREMY GREENFIELD
TechTarget IPO—Stock is Rising
 In a highly anticipated IPO, both for B2B media and tech stock watchers, TechTarget, the technology focused publishing company that prints CIO Decisions and operates over 30 industry Web sites, offered 7.7 million shares on Nasdaq this week with the intention of raising $100 million. (Click here to see what the stock is currently trading at.) At the closing bell on Thursday, the stock had risen 14% to close at $14.79, up from the initial offering of $13. The company plans on using the money to “repay certain outstanding debt [$12 million, initially, according to Forbes.com], and primarily for working capital and other general corporate purposes,” according to a statement. Though most outsiders look at this as a tech stock offering—and it is—it is also a B2B media play. “They certainly executed what appears to be a pretty successful IPO,” says Tom Kemp, a managing director at VSS (minonline is a property of VSS), a media investment firm, “which is not easy for an integrated B2B company of relatively modest size, but the stock is trading well in the early going.” What Kemp is referring to is the most recent and most visible past B2B IPOs: Primedia and Penton. Penton, which at one point spiked to about $32 per share, was hovering below $1 after being delisted before being sold last year to Wasserstein & Co. And since 2000, when Primedia eclipsed $30, the stock has fallen steadily, and now sits under $3 per share. Multiples and Liquid Capital Kemp also points out that TechTarget commanded a trailing multiple of 20 times EBITDA, and a projected multiple for 2007 of 15-16 times. The market likes digital-heavy media companies. “The key for them will be to execute, to use the resources they have to make successful strategic ad-on acquisitions,” says Kemp. The Public Challenge TechTarget’s managers will now have to contend with quarterly earnings expectations, Sarbanes-Oxley, and other financial reporting requirements—essentially the onuses of public ownership. “I wish them the best of luck and hope they’re successful,” says Kemp. “It could create other market opportunities for other B2B media companies. There hasn’t been a great track record of success for B2B media companies going public. It would be a good thing from an industry standpoint for this to be successful.” Stock Watch Private equity groups (including Kemp’s own VSS, which just bought Advanstar) that have just made B2B media investments will be watching this stock closely. Wasserstein & Co and MidOcean Partners especially, as there was some discussion of taking Penton public as an exit strategy. More Jeremy Greenfield
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