Bullish future for HBJ titles; Edgell plans to add to the 110 titles recently acquired in record-setting sale

Folio: The Magazine for Magazine Management, Jan, 1988 by Jean Angelo

Bullish future for HBJ titles

What big changes are in store for the Harcourt Brace Jovanovich (HBJ) Publications, now that former HBJ vice chairman Robert Edgell has signed an agreement to buy the group?

Nothing but growth, says Edgell, who had been with HBJ 17 years. Outside of exploring new magazine and trade-show launches, "there won't be any changes in the way we work. We've been a freestanding entity from HBJ all along."

Edgell, with the aid of investment firms and a corporate management group, was expected to close the magazine buy out by the end of 1987, paying $334 million for the 110 business magazines and for Beckley-Cardy, a subsidiary that sells school and office supplies. Although the offer was smaller than the $350 million to $400 million expected, it still represents the largest amount ever paid for a group of business magazines, says Edgell.

The new company, to be called Edgell Communications, Inc., is not the first launched by Edgell. He had founded a business magazine company, Ojibway Press, which HBJ purchased in 1968. Edgell acted as consultant to HBJ before joining in 1970.

HBJ put its magazines on the block last September to satisfy a bank agreement signed in connection with a $3 billion recapitalization. The financing plan was used to fight a hostile takeover attempt by Robert Maxwell and his British Printing & Communication Corp. In addition to the magazine group, the company has targeted two television stations and a history book club to sell, says Edgell.

No sell-offs expected

ECI is not expected to sell any properties. Nor will its management or operations change. Cleveland will remain the base for operations, while various publications will continue from Duluth, Minnesota; Chicago; New York; and Santa Ana, California. "I put these pieces together this way, and I'm not going to change it," says Edgell.

Joining Edgell in the buy out were Kidder, Peabody & Co., a subsidiary of General Electric; Wicks Communications Inc.; and Labovitz Corporation. All are investment firms. Although Edgell would not confirm the details of the financing, published reports say that Kidder, Peabody's share is largest--between 25 percent and 45 percent, or $83.5 million to $150 million. Together, Kidder, Peabody and the management group are majority owners; the other two firms involved have a small share, he says.

The management group includes HBJ's Richard Moeller, Orlando Fladmark, Thomas Greney, Ezra Pincus, Bernard Rogers, Arland Hirman, Herbert Bilderbach and Rod Ellis.

What's ahead?

Under Edgell's lead, HBJ Publications had been aggressively expanding, and several years ago purchased an expositions and conferences group composed of 23 trade shows, says Edgell. ECI, he adds, will maintain the momentum, adding trade shows, as well as business magazines. He would not, however, disclose specific plans.

ECI's spectrum of business magazines covers food, plastics, hotel management, lawn care and a host of other specialties. The company's nine health care publications include Modern Medicine and Physician's Management; its food magazines include Restaurant Management, Snack Food and Candy Industry. Most of the magazines are controlled, nonpaid circulation, but some, like the education magazine Instructor, with a 262,000 circulation, are paid.

The gross revenues for the magazine group totaled $147 million last year; Beckley-Cardy revenues were $70 million, reports Edgell.