- PR software giants Cision and Meltwater are planning to merge and the Justice Department’s antitrust division has probed the potential tie-up, asking how the deal might affect competition and pricing in PR software, sources said.
- Three people said the Justice Department contacted them in early summer, asking about the PR software industry, how a potential merger of Cision and Meltwater would affect their competitors, and if they believed it would raise prices for their customers.
- Cision declined to comment. Spokespeople for Meltwater and the Department of Justice did not respond to requests for comment.
- Visit Business Insider’s homepage for more stories.
PR measurement giants Cision and Meltwater are planning to merge, and the Justice Department’s antitrust division has probed the potential tie-up of the two biggest PR software companies, asking how the deal might affect competition and pricing in PR software, multiple sources said.
Three people said the Justice Department contacted them in early summer, asking about the PR software industry, how a potential merger of Cision and Meltwater would affect their competitors, and if they believed it would raise prices for their customers.
Cision declined to comment. Meltwater and the Justice Department didn’t respond to requests for comment by press time.
Cision and Meltwater have rapidly expanded their market share in recent years
Cision and Meltwater are software-as-a-service companies that PR agencies like Edelman and giant companies like Google use to push out their messaging and shape public opinion.
Customers use them to distribute press releases, create email lists of journalists and influencers, monitor media coverage and social media activity for their clients, and measure the impact of that coverage, among other things.
Cision formed in 2014 through a merger with Vocus. Over the past six years, Cision has spent hundreds of millions of dollars to acquire a dozen competitors with private equity backing, the most expensive being Trendkite, which it bought for $225 million. Beyond its tracking and measurement software, Cision’s products include press distribution services PRWeb and PR Newswire.
Separately, Cision has sought a buyer for Trendkite; read leaked slides from its pitch deck here.
Cision briefly went public through a reverse merger in 2017. But two years later, private equity firm Platinum Equity acquired the company for $2.7 billion and took it private again, which was expected to allow it to lower prices, invest in technology, and acquire more companies. Cision reported $730.4 million in annual revenue in 2018.
Meltwater raised $60 million in debt funding with Silicon Valley Bank and Vector Capital in 2017, and an additional $175 million from Vista Credit Partners two years later.
Since its 2001 founding, Meltwater has acquired 13 companies, including social analytics company Sysomos, according to Crunchbase.
Meltwater has always been privately held, but Forbes and analytics platform Craft.co pegged the company’s revenue around $300 million in 2016, with annual client fees ranging from $5,000 to $25,000. The company publishes its finances via the Dutch Chamber of Commerce. That information is available to subscribers only, but the most recent numbers show $315.5 million in revenue for 2018 with a net loss of $37.1 million, according to a person who viewed the numbers and shared them with Business Insider.
Some expressed concerns that a proposed merger would hamper competition
Some sources expressed concern that a merger of the two companies would staunch competition and effectively create a monopoly.
“What I see as harmful is they keep high-level prices and enforce longer term contracts and make them harder to get out of,” said an executive at a Cision competitor who was contacted by the Justice Department.
Cision charges some clients as much as $20,000 to use its services, this person said. But in the past, clients could play Cision and Meltwater off each other to get lower rates.
Over the years, Cision has faced pressure to revamp its customer services and provide better technology as new companies enter the market. One PR executive told Business Insider they were thinking about replacing Cision but that a merger with Meltwater, which has better predictive analytics and machine learning technology, could make them reconsider that decision.
One PR executive says Cision wouldn’t budge on payment terms during the pandemic
Beth Cleveland, global president of PR firm Praytell, said most firms use several measurement and distribution platforms including Cision, MuckRack, and Critical Mention, and that she audits each one as their contracts come to an end every year or two.
Cleveland said she believed a merger could give Cision more leverage on pricing and payment, an area where she said the company wouldn’t budge during the pandemic when Praytell sought more flexible terms for clients.
“They’re very focused on the bottom line, ultimately,” Cleveland said.
Cision and Meltwater shook up their leadership earlier this year
Cision named new leadership after CEO Kevin Akeroyd stepped down in February, a step which is common for companies ahead of an acquisition.
Platinum Equity partner Brandon Crawley took over as CEO and another Platinum Equity partner was named chief financial officer earlier this month. The firm also named a new chief operating officer, CMO, and head of distribution.
San Francisco-based Meltwater also named new leadership in May, promoting executive director of products Niklas de Besche to CEO.
Lucia Moses contributed reporting.