Bisnow Media, the eponymous business chatterbox founded by a D.C. entrepreneur, has been acquired by a private-equity firm for an estimated $50 million.
The purchase by the New York-based Wicks Group closed earlier this month. Founder Mark Bisnow and Ryan Begelman, who served as vice chairman and also owned part of the company, have left the business, Bisnow said.
Bisnow and Begelman built a multi-city enterprise that combined gabby email newsletters with an events business centered on commercial real estate and other industry topics. Bisnow said the company had engaged a New York investment bank in December to identify opportunities.
Terms of the deal were not disclosed, but parties familiar with the transaction confirmed the $50 million price tag reported earlier by Fortune.
Bisnow, 63, came close to financial home runs earlier in his career when he worked at Washington-area technology firms MicroStrategy and WebMethods, both of which had highflying stocks that crashed during his service at each.
“I have been at it for more than 11 years,” Bisnow said in an interview. “I thought it was time to let the millennials take it from here.”
The company started by Bisnow and his son, Elliott, has 80 full-time employees across the country, including 15 in Washington. He hired Begelman, a deal guy with the D.C. private-equity giant Carlyle Group, as chief operating officer in 2009.
Begelman and Elliott Bisnow moved to New York to see whether they could replicate the success Mark Bisnow had had in Washington, where he was a common sight at business and philanthropy events, snapping photos of people and writing what they were up to. From a small rented apartment, they stormed the real estate companies and brokers throughout the city, trying to educate the Cushman & Wakefields of the world on digital media advertising and the power of live events.
At the time, the city’s financial and real estate businesses were reeling from the collapse of Lehman Brothers and the onset of the ensuing financial crisis.
“New Yorkers are tough to begin with, even on a good day,” Begelman said. “They were depressed. They would say: ‘You have to be out of your mind. My father’s father was advertising in the same print paper for decades. The last thing we are going to do is try something new.’ ”
But with the decline of print and the rise of a new, digital-oriented generation, advertising began to trickle in, then flow, and flow even more. After they started cracking the New York market, they moved to other cities, including Chicago, Dallas and Los Angeles.
“I crashed on couches of friends in Chicago, doing the same thing, running around and begging and pleading for real estate advertising,” Begelman said.
It took until 2013 before they began to see revenue outpace costs.
Profits first grew to tens of thousands, then hundreds of thousands, then millions. Operating margins climbed from 11 percent to the upper teens, then the low 30s and the high 30s. Bisnow and Begelman bootstrapped the operation, using profits to fund expansion. There were no new investors. There was no debt.
“No debt and no outside investors were personal obsessions,” Begelman said.
The 12-year-old media empire, split between New York and Washington, now includes 40 online publications focused mostly on commercial real estate in 29 cities across the country, including Boston, Houston and San Francisco.
The company also includes a lucrative networking and conference business that draws about 80,000 attendees to the 300 events it organizes annually.
The media company has been profitable for 10 years. In 2013, Bisnow Media grossed nearly $14 million and earned a profit of more than $2 million, according to estimates at the time.
Mark Bisnow handed over the chief executive’s job to Begelman in 2013. Will Friend has since assumed the role.
Mark Bisnow was born in Los Angeles and attended Stanford, then worked on Capitol Hill for Sens. Hubert Humphrey (D-Minn.) and John Heinz (R-Pa.), and for Rep. John Anderson (R-Ill.) when Anderson ran for president as an independent in 1980. Bisnow graduated from Harvard Law School in 1985 and worked as a corporate law associate but wanted to be an entrepreneur.
The growing Internet gave Bisnow the idea of sending a targeted newsletter to niche audiences about such topics as real estate and technology. He started it in his home in 2003, funding it with about $250,000 he had in retirement savings. He tried his humorous, light approach — pushing the tidbits to thousands each day, hoping it would serve as an online diversion from work.