Dutch news media company De Persgroep operates in a world upended by ongoing digital disruption. The company stepped up its own digital transformation with last year’s acquisition of comparison website Independer. De Persgroep Nederland CEO Erik Roddenhof: “News and services represent a perfect ecosystem for the future.”
Last October De Persgroep acquired Independer, the leading comparison website for insurance and other financial products in the Netherlands, from insurance company Achmea. In acquiring the company, CEO Erik Roddenhof secured a major new source of online revenue for De Persgroep. The media company was backed by Rabobank’s team of M&A bankers, who maintained that the acquisition would be a game changer for De Persgroep’s online business.
To what extent is a comparison website for insurance and other financial products a good fit for a leading media publisher? According to Roddenhof: “We are in the business of empowering consumers. For many years, our news media outlets have helped consumers to make up their minds on various issues, and our new online services – including Independer –provide them with information and advice to help them make informed choices.”
In acquiring Independer, De Persgroep has added a new business line to its existing activities, one created to guard the company against the digital disruption that has been sweeping across all industries and make it more resilient for the future. Technologies such as the internet and smartphones enable new types of services and business models that allow newcomers to take market share from established players. Media companies such as De Persgroep are no stranger to this phenomenon: as an “old-school” media publisher, it was compelled to begin its digital transformation not long after the emergence of the internet.
De Persgroep – whose portfolio includes leading Dutch newspapers such as de Volkskrant, Trouw and Algemeen Dagblad, a large number of regional titles, and a popular radio station called Qmusic – has long been investing in digital innovation, both through organic growth and by means of acquisitions, including Dutch online services Tweakers and AutoTrack. Online versions were created to complement the offline media, followed at a later stage by tablet and smartphone editions. The Belgian-Dutch media company will continue to innovate as part of its mission to deliver reliable information. “Our brand of disruption is mostly created from within: we invest big and develop the most innovative news products ourselves, so we can also remain relevant in the digital realm in the future,” Roddenhof says.
“Our brand of disruption is mostly created from within”- Erik Roddenhof, De Persgroep
Fuel for Investment
Still, Roddenhof makes no bones about the fact that news media are constantly under siege, even at a time when readers are coming around to the idea of paying for access to quality digital news. “There’s been a shift in the behavior of both advertisers and consumers. We’ve managed to build a large, thriving company through acquisitions such as the newspaper division of the Wegener publishing company and, before that, PCM Uitgevers. We operate in a market where size matters, so to speak. And size is something we have in spades: we generated almost 1.6 billion euros in revenues last year. This gives us the financial foundation – or ”fuel,” as we like to call it – to invest in order to reinvent and digitally reinforce existing properties such as Het Parool and Qmusic. And as the third feature of our strategy, we are establishing a new business that will make us more competitive in the digital ecosystem. We have always invested in online services: we help consumers to simplify tough decisions by combining supply and demand. We previously did this for cell phones with our Tweakers service, for cars with our AutoTrack business, for jobs with the Nationale Vacaturebank job database, and now we’ve also added insurance products to our roster of services via Independer.”
The information provided by Independer integrates seamlessly with the news-gathering of other De Persgroep media outlets, Roddenhof explains. “It also helps that a comparison site like Independer works in conjunction with the news. For example, if there’s a change in the health insurance system, this is generally first reported in the newspaper, in an article explaining the implications of the change for consumers.”
As such, news media outlets tend to represent the first step in a customer journey that may end with a transaction on a comparison site. The news media and online services enhance and complement one another throughout the customer journey. The fact that they earn their money from the fees paid by insurance companies and online retailers for delivering new customers does not detract from their independence: “When we were in talks with Independer, they kept repeating to us how important it was for them to remain independent. It seemed almost comical to us – in a news media business like ours, that’s considered such a given that it doesn’t even come up in conversation within the company.”
”There’s been a shift in the behavior of advertisers and consumers”- Erik Roddenhof, De Persgroep
Roddenhof declines to disclose the amount his company paid for Independer, which generated a profit of 10.7 million on revenue of 56.3 million euros in 2017. Achmea posted a book profit of 150 million euros on the transaction.
“We managed to persuade Achmea to enter into talks with us before an official sales process got underway,” says Rabobank M&A’s Robert-Jan Vijverberg, who advised De Persgroep on the acquisition. Michel Cijsouw of the same department, who was also involved in the transaction, says: “We made sure to pre-empt the process and worked through the summer with a team from De Persgroep so we could stay ahead of a possible auction process.”
De Persgroep’s interest in Independer was fueled by the outcome of an in-depth market analysis it conducted in association with Rabobank. Roddenhof: “We got to know Robert-Jan because he was very smart in the way he put himself on our radar. He made a passionate case for what he felt would be the best strategy for us based on his knowledge of, and experience with, the media world.” Both parties confirm that a mutual connection was soon established. Vijverberg: “Online disruption is a challenge for all of us. Players such as Independer benefit from two megatrends: Consumers are more likely to search for and select products and services online. They also tend to switch far more often than they used to: their cable company, their energy provider, their insurance provider, and so on. If switching becomes easier, consumers are more likely to want to compare. The sites specializing in this area operate in a winner-takes-all market, and if the opportunity presents itself to conquer this market, you need to rally behind the leading operator in the market, provided that the price is right. We are not the type of advisors who push through if a deal is not in the client’s best interest. This means you sometimes have to advise your client to walk away from a deal, because for us the long-term relationship with our client always comes first.
Vijverberg recounts how De Persgroep and Rabobank have truly been partners from the very first meeting until the closing of the deal: “It helps that Robert-Jan and Michel are both very easy to get along with and good communicators,” Roddenhof says, “but I was particularly impressed by their knowledge of, and expertise in, the media industry and the creativity of their ideas, which were anything but run of the mill. They also made sure we stayed focused during the process and separated the wheat from the chaff.”
Independer has helped drive the company’s revenue from online services to more than 170 million euros. But this is far from the last acquisition to be made by De Persgroep in the online world. “We are always on the lookout – and that’s all I’m going to say,” he says, laughing. “But seriously: This is a sizable acquisition, and my sharehlder told me he would like to see some return on investment first. But we’re not quite there yet: we feel the combination of media and online services represents a perfect ecosystem for the digital future, in which print media will gradually become extinct.”