Private equity giant Blackstone Group has reached an agreement to buy International Data Group in a deal valued at $1.3 billion, including equity and debt, that should help accelerate the Needham company’s expansion efforts.
Blackstone unveiled the deal with IDG’s current owner, China Oceanwide Holdings Group, on Thursday. The Beijing-based conglomerate had acquired IDG four years ago from family members of founder Pat McGovern, who died in 2014.
Peter Wallace, global head of core private equity at Blackstone, said the New York investment firm was already familiar with IDG as a customer and was looking for a leading player in market research and data insights for the technology field.
“There’s no better company in the world, frankly, than this business in terms of market intelligence and having those insights,” Wallace told the Globe. “We were scouring the world and looking for . . . the best repositories of data, and what companies were best positioned to take advantage of this trend, and IDG was at the top of the list.”
Wallace said Blackstone fully intends to back growth plans already set in motion by IDG chief executive Mohamad Ali, to add to IDG’s 3,000-person global workforce and increase its annual revenue.
“We hope this company will be significantly larger and more successful in the future,” Wallace said.
The sale is expected to close in three to four months after receiving the necessary regulatory approvals in a number of countries where IDG does business, Ali said. He said China Oceanwide was approached late last year by another potential buyer for IDG, and several other potential suitors emerged in the ensuing months.
For Ali, the sale provides vindication of the shift underway at the company to expand its sales platform connecting buyers and sellers for big IT hardware, software, and services transactions. In particular, Blackstone’s resources and know-how could be fruitful as Ali looks to acquire other data providers.
“We’ve been in this transformation to go from a content company to a technology platform,” said Ali, who joined IDG in 2019 after leading the Boston data-storage company Carbonite and will stay in the job under Blackstone’s ownership. “We’re a company that’s on a growth trajectory. What Blackstone wants to do is put more money behind the strategy and grow it as fast as they can.”
Growth wasn’t necessarily a sure thing at the start of the COVID-19 pandemic. Ali acknowledged he was concerned about the company’s financial health at the time. For example, IDG’s events business shut down, but Ali hired someone to reimagine that line as a digital events business, and it became enormously successful, logging nearly 1,000 such events by the end of the year.
IDG is split into two businesses: IDG Communications, which includes its numerous online tech magazines, and IDC, the “market intelligence” arm.
McGovern started IDC in 1964 with the latter business in mind, essentially providing customer research to help mainframe developers such as IBM tailor their products for clients’ needs. McGovern launched the media business a few years later, an operation that now includes the likes of Macworld and Computerworld. (The print editions were phased out years ago.)
IDG Communications is now offering to let readers of many stories “opt in” to receive related content from tech vendors, Ali said, while it’s rapidly expanding the various IT industry expertise and data offerings on the IDC side. The company is increasingly relying on its software-as-a-service subscription model, with the recurring revenue that comes along with that approach.
Its overall revenue growth accelerated during the past 12 months, Ali said, at a pace that eventually surpassed rivals Gartner, Forrester, and TechTarget.
IDG is adding jobs in a number of places already, including a call center in Tampa, Fla., an engineering center for the business-to-business marketing platform in Reston, Va., and a data-science hub in the Czech Republic.
News of the Blackstone acquisition comes as IDG is preparing to reopen its US offices on June 14, including its new headquarters in Needham, where about 500 people will be based and about a quarter of employees will return initially. Ali said employees have the option of staying home through the end of the year.
The deal also adds to Blackstone’s considerable holdings in Greater Boston, which are primarily in the life-sciences sector. The company estimates it owns more than $12 billion worth of real estate in the region (including through its BioMed Realty subsidiary), runs a large life-sciences investment business in Cambridge, and has stakes in the local software firms UKG and Ascend Learning.
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