Penton Media, Inc.
Address:
1100 Superior Avenue
Cleveland, Ohio 44114-2543
U.S.A.
Telephone: (216) 696-7000
Fax: (216) 696-0836
http://www.penton.com
Statistics:
Public Company
Incorporated: 1910 as Penton Publishing Inc.
Employees: 1,400+
Sales: $200 million (1997)
Stock Exchanges: New York
Ticker Symbol: PME
SICs: 2721 Periodicals: Publishing & Printing; 7389 Business Services, Not Elsewhere Classified
Company Perspectives:
Penton Media, Inc. is a diversified business media company. We're a publisher of authoritative trade magazines, producer of important trade show/conference events, provider of electronic media and communication tools, a source for reliable direct mail lists and research services, and creators of custom publications. All of that, and more.
Company History:
Considered a primary business resource by marketing leaders around the world, Penton Media, Inc. provides marketing and media solutions in an important cross section of industries: design/engineering, electronics, food/hospitality, government/compliance, information technology, leisure, management, manufacturing, mechanical systems and construction, and supply chain/aviation.
Overview
Although Penton Media, Inc. became an independent public company in 1998, it has published trade periodicals for a variety of industries for more than 100 years. As Penton Publishing the company began by publishing magazines for the iron and steel industry. It gradually expanded its scope and published magazines covering a wider range of industry, equipment, and machinery. In the late 1990s the company expanded its trade show activity and began offering a wider range of media services to the industries it served. In December 1998 it acquired Mecklermedia Corporation, making Penton Media the largest publicly owned, diversified business-to-business information and media company headquartered in the United States.
John Augustus Penton Published the First Issue of Foundry, 1892
Around 1887 John Augustus Penton began developing a trade publication to serve the casting industry. An iron molder by trade, he was a native of Canada, born in Paris, Ontario, in 1862. When he was 21 he moved to Detroit, Michigan, and served as president of the Brotherhood of Machinery Molders from 1887 to 1892 and editor of its journal, Machinery Molders Journal. In 1892 he published the first issue of Foundry in Detroit.
In 1901 John Penton moved to Cleveland, Ohio, to head the Iron and Steel Press Company. It published Foundry magazine and another magazine then called the Iron Trade Review, which eventually became Industry Week. In 1910 Penton moved from rented quarters to a four-story brick building that became known as the Penton Building. The company's printer, Whitworth Brothers Company, also moved into the building. In 1912 Penton Publishing purchased the Whitworth Brothers Company, giving it the ability to print its own magazines and take on contract printing work.
In 1925 Penton won printing contracts for two magazines, Time and the Saturday Review of Literature. Over time the company took on more outside printing contracts. As the circulation of Time grew, it became clear that Penton would have to decide whether to purchase more printing equipment. When it came time to renew the contract with Time, the board of directors of Penton Publishing decided not to renew the contract, thus ensuring that publishing business magazines would be the company's main business.
Machine Design First Published, 1929
Penton published the first issue of Machine Design in 1929. The idea for the magazine, which was written for design engineers, came from a salesman for American Machinist named Frank "Spats" Johnson. When McGraw-Hill, which published American Machinist, turned down Johnson's idea for Machine Design, Johnson quit his job and approached Penton with the idea. Penton was interested and formed a subsidiary, Johnson Publishing Company, to publish the new monthly named Machine Design.
In 1930 the name of Iron Trade Review was changed to Steel. The new title reflected changes in editorial policy, advertising sales, promotion, and distribution. In 1938 Penton acquired New Equipment Digest, which was in bankruptcy, for $30,000. The magazine's printing forms were shipped from Chicago to Cleveland, and Penton printed the April 1938 issue only a few days behind schedule. Also in 1938 Penton began helping the U.S. Census Department develop the Standard Industrial Classification (SIC) system, which was completed in 1945.
During World War II Penton was publishing Steel, Foundry, Daily Metal Trade, Machine Design, and New Equipment Digest. Because of government restrictions, though, Penton was forced to cease publication of Daily Metal Trade with the March 11, 1943 issue. The editors of Steel and Foundry both were called to serve as presidential advisors during the war.
Penton Press Established, 1968
By the early 1960s the rapid growth of Penton's publications was straining its printing capabilities. In 1964 the company began looking for a site that could be converted to a printing facility. Construction of a new printing plant began in 1967 in Berea, Ohio, and on April 16, 1968 the plant that housed Penton Press opened. It featured a five-unit web offset press. The cost of building the plant exceeded $3 million.
In 1970 Steel magazine was renamed Industry Week. The name change reflected the changing scope of the magazine to include broader areas of industrial management.
Acquired by Pittway Corporation, 1976
As America celebrated its bicentennial in 1976, Penton was acquired by Pittway Corporation and merged with Industrial Publishing Company (IPC), also based in Cleveland, to form Penton/IPC Publishing. The company would be known as Penton/IPC from 1976 to 1986, when the "IPC" was dropped. Pittway was a Chicago-based company that produced security systems. It had acquired IPC in 1964. IPC published a large number of small trade magazines that concentrated on highly specialized, narrow market segments, such as the air conditioning and refrigeration business, fluid power, welding design, and more. IPC's publications complemented those of Penton, which had much larger circulations.
At the time of the merger, the new company's revenues were about $50 million. Three years after the merger Penton/IPC's revenues had almost doubled and pretax profits had tripled.
Began Making Acquisitions, 1985
The year 1985 marked the beginning of a period of growth through acquisitions and new product launches. The company acquired Millimeter in 1985, and in 1987 Foodservice Distributor was launched. In 1987 Penton acquired American Machinist and 33Metal Producing.
A $12 million expansion of Penton Press that was begun in 1988 for its 20th anniversary was completed in 1989. It included a 28,000-square-foot addition, a massive nine-stand web press, and a $1 million binder. The expansion doubled the press's capacity.
In 1989 Penton entered the growing electronics market by acquiring the VNU Magazine Group, which included Electronic Design, Electronics, and Microwaves and RF.
New Programs and Services, 1991
Penton began a formal quality improvement program in 1991. Information obtained from employees led to the creation of the Penton Quality College, which conducted ongoing training classes for Penton employees. The company also initiated a Quality Recommendation program, which encouraged employees to submit suggestions for process improvements and new business. Input also was sought from readers and advertisers through surveys and focus groups.
These programs led Penton to expand its services into other areas of business communication. In 1992 the Custom Publishing Group was launched. It used the company's resources in writing, printing, and graphics to produce magazines, newsletters, and brochures for other companies.
In 1992 Penton acquired Food Management magazine from Advanstar Communications. Penton launched its first CD-ROM product in September 1993. Titled Concurrent Engineering Solutions, it contained editorial material from the first six months of 1993 from Machine Design, the MD Materials Selector, Power Transmission Design, and Hydraulics and Pneumatics, as well as all directory listings from those publications. Concurrent Engineering Solutions was followed in 1994 and 1995 by nowmedia and nowmedia II. These were CD-ROMs produced by Millimeter that were designed to help others produce their own CD-ROMs.
The Penton Institute was created in 1993. It produced seminars, conferences, and trade shows on topics selected by Penton editors. They covered emerging issues and trends in the industries served by Penton periodicals.
Metal Heat Treating was acquired from Chilton Company in 1993. The company also launched Government Procurement and Building Renovation. In 1994 Wireless Systems Design was launched. During the early 1990s Penton also launched several foreign publications. Also in 1994 Penton's direct mail subsidiary, Curtin & Pease/Peneco, acquired a direct mail operation called Feather Fine. Both were located in Florida. In 1996 the company added EE Product News magazine to its list of publications.
Expanded Media Services, 1997
In September 1996 Thomas L. Kemp was named chairman and CEO of Penton. He came to Penton from San Francisco-based Miller Freeman, Inc. Under Kemp, Penton would diversify its revenue sources to rely less on advertising revenue and expand its trade show business. For 1996 Penton reported $188 million in revenues.
In January 1997 Penton made the first of three trade show acquisitions for the year when it acquired A/E/C/ Systems International. A/E/C/ Systems International was a trade show company that produced technology-based exhibitions for the architectural, engineering, and construction markets. Penton's strategy was to acquire shows and conferences in markets where it published magazines. It also wanted to make acquisitions of trade shows that would support its international growth, primarily in Europe, Latin America, and the Far East.
Later in 1997 Penton acquired the United Kingdom-based Independent Exhibitions Ltd. At the end of 1997 Penton further expanded its trade show business by acquiring Baltimore-based Industrial Shows of America and its international affiliate. The three trade show firms acquired during 1997 added 34 shows to Penton's trade show portfolio. During 1996, by contrast, Penton sponsored just seven trade shows accounting for little more than two percent of its revenues for the year. In 1997 it sponsored 15 events representing five percent of its annual revenue. At the beginning of 1998 Penton had 55 events scheduled that were expected to account for nearly 15 percent of its 1998 revenues.
Became an Independent Public Company, 1998
As early as December 1997 Pittway Corporation announced plans to spin off Penton. For the year, Penton contributed $205 million to Pittway's revenues, or 15 percent. Penton's operating income and revenues had reached an all-time high. In April 1998 Penton Publishing changed its named to Penton Media Inc. to reflect the company's broadened business scope and direction. It planned to continue to provide business customers with a complete array of media for information and marketing solutions.
Penton Media Inc. was spun off from its parent company, Pittway Corporation, in August 1998, and Penton stock began trading on the New York Stock Exchange on August 10, 1998. At the time of the spin-off, Penton published 18 directories and 42 national business and trade publications.
Penton's first acquisition as an independent company was that of Donohue Meehan Publishing Co., which served the baking and convenience store markets. Chicago-based Donohue Meehan published one directory and eight magazines and had 1997 revenues of $9.4 million.
Acquired Mecklermedia Corporation, 1998
Penton completed its $274 million cash tender offer for all of the outstanding shares of Mecklermedia Corporation toward the end of November 1998. The acquisition added several Internet-related trade magazines, the Internet World and ISPCON trade shows, and the Internet.com address. It accelerated Penton's strategic growth plans for more diversified revenue sources and added greatly to its revenue from trade shows.
In November 1998 Penton announced plans to launch EE Product News China and Wireless Systems Design China magazines in 1999. Earlier in 1998 Penton had successfully relaunched Electronic Design China. Penton's Electronics Group publications in China were published jointly by Penton and CCI Asia-Pacific Ltd. of Hong Kong with support from China's Ministry of Electronics Industry Technology Information Research Institute.
Outlook at the End of the 20th Century
As Penton approached the end of the century, it published approximately 90 titles and employed more than 1,250 publishing professionals in offices throughout the United States and abroad. It owned a state-of-the-art printing facility and was expanding rapidly into other areas of business-to-business communication.
Goals for the year 2001 included reducing its reliance on advertising revenues and increasing revenues from trade shows and conferences. Plans called for advertising to account for 55 percent of revenue, down from 78 percent in 1996. Revenue from trade shows and conferences was expected to account for 25 percent of revenue, up from three percent in 1996. Other areas accounting for the company's revenues included subscriptions and list rentals (steady at four percent), information and databases (increase to five percent from −1 percent), electronic products (three percent), and direct mail and printing (eight percent, down from 15 percent in 1996).
Principal Subsidiaries: Donohue/Meehan Publishing Co.; Independent Exhibitions Ltd. (United Kingdom).
Principal Divisions: A/E/C Systems International; ISOA International.
Further Reading:
The History of Penton Publishing, Cleveland, Ohio: Penton Publishing, 1994.
Jensen, David, "People to Watch: Thomas L. Kemp," MIN Magazine, Vol. 2, No. 1, 1998.
Mather, Joan, "Penton Makes Major Move into Tradeshows in 1997 with Launches, Acquisitions," Tradeshow Week, March 2, 1998, p. 10.
"Penton Completes Tender Offer for Mecklermedia, Closes Acquisition," Business Wire, November 24, 1998.
"Penton Media Announces Launch of EE Product News China and Wireless Systems Design China," Business Wire, November 23, 1998.
"Penton Media Completes Mecklermedia Buy," Reuters, November 24, 1998.
"Penton Media Is Successfully Spun Off from Parent Pittway Corp.," The Simba Report on Directory Publishing, September 1998, p. 5.
Source: International Directory of Company Histories, Vol. 27. St. James Press, 1999.
