Magazine Marketplace: A highly selective industry chronicle

Folio: The Magazine for Magazine Management, June 1, 2003

THE DEALS

After a sluggish first quarter on the M&A front, things are...still sluggish. There does appear to be hope, though. "I do see an uptick in interest," says Joseph Berkery, president of Berkery, Noyes & Co. "There's a little bit more excitement than there had been earlier in the year. But there's still not a lot of activity going on. People are still cautious going forward."

Berkery says his "turnaround date" is by the end of this year, "and definitely by next year." Activity will not be at the same frenetic pace as it was in the late '90s through 2000, but there will be solid activity, he predicts. "We're going to be doing business in a new way," he adds. "We'll see a nice, steady pace - it's not going to be an extraordinary boom. People are going to be more cautious, more sensible, and sellers are going to get back into the market."

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Wicks Business Information acquires Venture Reporter magazine from MCG Capital

As part of the deal, Wicks also acquires the Venture Reporter database and related Rising Tide Studio products from MCG Capital. Terms of the deal were not disclosed. The group tracks venture capital investing and M&A activity in the United States. The product line will become a part of the Alternative Investor business unit at Wicks. "The real push in the business is going to be developing a database that serves smaller venture capital firms and service providers," says Doug Manoni, founder and CEO of Wicks. "We're going to evaluate what we're going to do with the magazine."

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Canon Communications acquires Modern Plastics and Modern Plastics International from Chemical Week Associates

Canon is the publisher of a competing b-to-b, Injection Molding Magazine. Terms of the deal were not disclosed. The domestic and international editions of Modern Plastics have a combined circulation of 52,700. The acquisition gives Canon, which is a Veronis Suhler Stevenson portfolio company, a stronger presence in plastics and, with the international edition, its first footprint abroad. The sale is part of a larger restructuring effort for Chemical Week (see story, page 34); in April the company eliminated 40 positions and plans to close Houston-based Lubricants World.

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Viastar Holdings acquires Moving Pictures International from Higgs Boson Media Holdings

The day-to-day operations of MPI, a London-based trade magazine for the film industry, will continue to be overseen by John Campbell, its publisher. Viastar, which is based in Los Angeles, is planning to relaunch MPI and is expanding MPI's U.S. office. Higgs Boson, a European-based investment firm, had recently acquired a stake in Viastar. Terms of the deal were not disclosed. - Geoff Van Dyke

THE DEVELOPMENTS

PRIMEDIA: WHAT'S NEXT?

The moment former Primedia chairman and CEO Tom Rogers left the building on April 17, industry wags began speculating that majority owner Kohlberg Kravis Roberts was looking to sell off everything. Indeed, last month's departure of Elizabeth Crow, executive vice president and editorial director of Primedia's consumer magazine group, and the impending departure of Linda Platzner, president and group publisher of Primedia's teen group (who will leave once the sale of Seventeen to Hearst Magazines is finalized), indicates a desire on the part of the company to shed consumer pounds. (At Primedia's Media Central unit, about 25 staffers, in departments ranging from sales to production to editorial, were laid off on May 8. The staff cuts came as Primedia reassigned several of its Media Central properties - including Folio: and its sister newsletter, "Folio: First Day" - to the Primedia Business Magazines & Media unit. Kagan World Media and Simba properties, which were also part of Media Central, will move beneath the umbrella of Primedia's consumer division.)

In its latest quarterly report, however, executives at Primedia indicated a measured approach to the M&A market. Still, some media observers believe the intention of KKR is to sell all the assets, although the timetable is in question. "Ultimately they will sell everything," says one media investment banker, who requested anonymity. "It's all a timing issue. The fact that we're getting off the tail end of a severe ad recession, the timing is not great." Says Reed Phillips, managing partner at media investment bank DeSilva & Phillips, "Most believe they'll either sell off everything, or they'll determine what their core properties are and sell off everything that's not core. We believe they're in the process of determining what's core and what's not core." Representatives of Primedia would not comment.

OUR TAKE: Don't expect to see a fire sale any time soon, but in the short term, look for Primedia to unload assets that will sell at more than 10 to 12 times EBITDA. Primedia's long-term strategy is still anyone's guess. - Susan Thea Posnock and GV

CITIES BOUNCE BACK

Following the strong rebound trend for other city and regional magazines, Indianapolis-based Emmis Publishing saw its net revenues increase from $16.3 million to $18 million for the fiscal fourth quarter, it announced in mid-April. For the year, in fact, the publishing unit (part of parent company Emmis Communications) was up - from $71.2 million to $72.8 million. Gary Thoe, president of Emmis's publishing unit, points out that local advertising has remained a strong point for the magazines. "We've had some softness, as everyone has, in national revenue," he says, "and we've been able to make that up in most of our markets locally, with creative selling." He cites Texas Monthly, which was roughly flat in revenues for the fiscal year (23.7 million in fiscal 2002 versus $23.36 million in fiscal 2003) as an example of a magazine that would have been down in revenues without a boost from the local side.