Elsevier Acquires Knovel Corp.
Posted On January 10, 2013
The new year rolled in with a bang for the information industry. On Monday, Jan. 7, 2013, Elsevier announced that it had acquired Knovel Corp. The global publisher and leading provider of STM information products and services added Knovel’s web-based engineering application to its portfolio. And from the looks of it, the acquisition should be a win-win-win for Knovel, Elsevier, and their end users.
Since Knovel was founded in 2000, it has become a valued resource for more than 700 corporations and more than 400 engineering schools worldwide. It is now the go-to place where engineers can find data, all seamlessly integrated from 100-plus engineering societies and publishers, and all on an easy-to-use, interactive platform. Engineers have access to volumes of content and data, and they can easily drill down into existing charts and tables for specific results and customize those results to fit their particular needs.
The past few years have been exceedingly busy for Knovel. It boosted its content collection by 20%, partnered with Engineers Without Borders, and expanded the offering in its Yaws’ Critical Property Data for Chemical Engineers and Chemists (originally launched in July 2012). But the timing was right for the acquisition, according to Knovel CEO and president Chris Forbes.
“It happened in fairly short order,” says Forbes. “Knovel had institutional investors, so it was our intention all along for such an event to occur. Having said that, we had not set ourselves up for sale, rather we set ourselves up for aggressive growth and in investing our increased cash flow for the company.” He credits Elsevier with being an “excellent partner that would allow us to grow the business even more aggressively than we had contemplated, someone who shared our vision for growing the business and able to bring a number of things to bear, clearly in terms of growth and the global reach of their sales and customer support capabilities.”
Knovel has always taken pride in the scope of its customer service, says Forbes. “As you know, we are very customer-centric, so the ability to lever that capability into doing so much more for our customers is particularly attractive.” With the acquisition, he believes Knovel and Elsevier share a plan to grow the Knovel brand together. Post-acquisition, Knovel will move ahead with its headquarters and staff in New York City, with Forbes as head of the company, and with its own brand name under the new Elsevier ownership umbrella. For Forbes as an entrepreneur and Knovel co-founder, the agreement terms between Knovel and Elsevier were critical. “We care that we have that common vision for the substantial growth potential in this market, and Elsevier has asked me to stay on and help them with that,” he says.
The acquisition is also a good move for Elsevier. “If you look at our strategy, we focus on high-quality information in terms of the research and development segments,” says Alexander van Boetzelaer, managing director of Elsevier Corporate Markets, “especially where we believe information can influence outcomes.” Elsevier adds value as an institution with a well-established life sciences business including drug discovery and drug development, and online solutions such as ScienceDirect, Scopus, Reaxys, ClinicalKey, Mosby’s Nursing Suite, the SciVal Suite, and MEDai’s Pinpoint Review. Though Elsevier has volumes of vetted content, “[W]e didn’t necessarily have the mechanism or the platform to deliver that content in a way that made real sense and a difference to the users,” he says. That’s why the acquisition with Knovel made sense.
“Knovel is so strong, and Knovel has an established position, an established platform in the market in the applied engineering market where we can bring the content exactly the way an applied engineer wants to do that,” says van Boetzelaer. What’s more, Elsevier can build on that platform. “For me, this is very much the future of our engineering segment, and Knovel will help provide the foundation for that growth,” he says.
With the ink barely dry on the agreement papers, van Boetzelaer says the Elsevier and Knovel teams are working together on dotting the “I”s and crossing the “T”s on the details of the acquisition. Certainly, Elsevier’s interest in Knovel focuses on the brand and the platform, but it also focuses on Knovel’s people who “have great domain expertise,” he says. “They know the users.” As for future growth, he says Knovel’s integration into Elsevier will happen when it makes sense and in terms of delivering maximum value for all parties. “And from my perspective, a lot of value is in the Knovel brand and the position it has in the engineering community, and it is our intention to lead with the brand,” he says.
The Knovel Brand
Years ago, when I first met Forbes at an Online Information conference in London, he gave me a laminated business card. He said his staff each carried one, and Forbes kept his in the top pocket of his suit jacket closest to his heart. The words on the front of the card succinctly summed up Knovel’s vision, mission, and core competency; on the flipside were five of its top values. And Forbes and his team have clearly kept those business goals in view as the company continued to grow. But industry pundits always wonder what’s next in any acquisition.
“The acquisition of Knovel definitely seems like a strategic way for Elsevier to expand its product offerings,” wrote industry consultant Ben Hoganson, owner of Autumn Elm Information Services, in his blog Swaying Branches on Jan. 7, 2013. “They can expand laterally without having to invest the R&D to design a rival product, and they’d already have an established customer base.” His big concern is whether Knovel subscribers will see price increases at renewal time under Elsevier’s ownership. He also hopes that Knovel’s data search interface will be revisited, since he sees some of the recent enhancements as “a step back in usefulness.”
Industry analyst John Blossom, president of Shore Communications, Inc., has seen Knovel grow into the “leading paradigm for the evolving SciTech editorial model,” he posted in Contentblogger on Jan. 7. “Kudos for Elsevier for jumping on the opportunity—it’s a platform that will be a great value leader for years to come.” While Knovel has been aggregating its extensive content collection and building a responsive interface, Elsevier hasn’t been as successful at accelerating a subscriber’s productivity all that much, writes Blossom: “While Elsevier has been hard at work trying to improve its own content aggregation services, ultimately its efforts have been stymied at the level of how the actual information sources are structured.”
After hearing the news, two Knovel users weighed in on the acquisition from their perspectives. Gabrielle Hysong, information operative for Rolls-Royce Library & Knowledge Services Center, hopes that after the acquisition Knovel will continue to add new titles, which she considers one of Knovel’s ongoing strengths. Hysong says that since Rolls-Royce uses Knovel extensively, she is comfortable with its current platform and doesn’t advocate any major modifications. In her words, “Please don’t change the intuitiveness of the platform,” she says.
Randy Reichardt, research services librarian (engineering) at the Science & Technology Library at the University of Alberta in Canada, says he is cautiously optimistic about the acquisition and hopes it succeeds. He hopes Elsevier maintains “a hands-off approach and [doesn’t] tinker with Knovel functionality.”
Both Hysong and Reichardt praise the existing customer service that is clearly one of Knovel’s strong points and one of the values espoused on the Knovel business card: “Team members being personally accountable for the success of our company and its stakeholders (users, employees, content partners, suppliers and community).”
Van Boetzelaer acknowledges that there is a high degree of overlap between the customer bases of Elsevier’s ScienceDirect and Knovel, but the users within those companies are very different. “And that is something that we want to keep in focus,” he says. “ScienceDirect has a very specific application, and Knovel has a very specific user base.” Both van Boetzelaer and Forbes say they are committed to adding to the existing platform and its functionality to create a platform that is even closer to what the users want. “And we can add more value faster than we could have done separately,” says van Boetzelaer.
So it’s full steam ahead for Knovel, albeit with a more aggressive edge, says Forbes. “The overall product strategy, which is inclusive of our technology, and Elsevier’s strategies will remain the same,” he says. “Elsevier’s global reach will make it easier for us to further develop that large portfolio of content we deal with from more than 100 content partners today.” Forbes admits that Knovel was criticized in the past for being overly U.S.-centric. “We’ve worked dramatically over the past few years to expand the offerings with European organizations to deliver data that is truly global,” he says. And with the acquisition, he expects Knovel’s content strategy to evolve much more aggressively and “allow us to grow and serve other markets more effectively with content partners in those markets.”
From the get-go, Knovel’s mission was “to be the leader in delivering quick and complete data solutions to researchers by providing comprehensive electronic libraries with embedded software tools that easily integrate into their workflow.” And Forbes only sees that corporate mission continuing.
“We felt that this was a very good time for the two organizations to come together,” says Forbes, “particularly since we’ve enjoyed a lot of growth, and this is a very exciting area for growth for both companies. This is a multimillion-dollar opportunity to grow a business and that’s something that will move the dial for Elsevier as well,” he says.