Case Studies in Mergers & Acquisitions

Global Investor Publishing

In 1998, from their offices in Alexandria, Virginia and Cambridge, Massachusetts, Brad Durham and Dwight Ingalsbe, co-founders and Managing Directors of Global Investor Publishing, watched a series of economic meltdowns that started in Asia and ran rapidly West through Russia.  The results in the international economic community were devastating. 

With the collapse of the Russian economy, Durham and Ingalsbe feared that their most profitable and lead product, the financial newsletter Russia Portfolio, would experience a significant reduction in circulation and possibly bring an end to the five-year-old company. 

Within months, large Russian financial institutions either dropped their expensive subscriptions or simply didn’t renew because they were ultimately liquidated and ceased to exist.  Outside of Russia, subscription renewals, while less dramatic, were also on the decline.  The Russian stock market, once the gem of the new capitalist frontier, was in ruin and portfolio managers were pulling out assets and no longer required the sector specific expertise of Global Investor Publishing.  The decline in revenue resulted in a net loss of $40,000 for the 4th quarter.

One potential bright spot on the horizon was the launch of the company’s new financial newsletter, Central Europe Portfolio in 1997 concentrating on the securities markets in the Czech Republic, Hungary, Poland, Romania, and Slovakia and generating approximately $100,000 in revenue.  But with the decline of the Russian markets, these economies also faltered dampening sales of the new financial product.

To pull the company back on track Ingalsbe and Durham shifted gears and refocused their attention on a new prospect.  While international portfolio managers might not be as interested in Russia specific information, they might be interested in how assets moved in and out of emerging countries and regions.  Both had used the data supplied by Ian Wilson, an entrepreneur that had the ability to take large amounts of information and carve it into a usable medium.  Maybe this was the time to entertain the possibility of an acquisition of Ian’s company, Emerging Market Funds Research, Inc.?  The real risk of course was that Emerging Market Funds Research or EMFR, was a data company and Durham and Ingalsbe’s experience was in publishing.