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Forbes Media Explores Sale Said to be seeking $400-$500m

18 November 2013

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By Lucia Moses

 

Forbes Media LLC is exploring a sale of the 96-year-old media company. CEO Mike Perlis announced the news in a memo to employees today saying that as a result of the company having its best financial performance in six years, the company has gotten “more than a few” indications of interest. Deutsche Bank is handling the process.

 

Forbes joins other traditional publishing companies that have put themselves on the market in recent years, including Maxim and Businessweek, as they struggle with declining print revenue amid growing online competition. Started in 1917 by B.C. Forbes, Forbes Media has gone through its share of turmoil; in 2006, the Forbes family owners brought in private equity firm Elevation Partners as a minority partner. Since then, as rival Fortune revealed in a 2011 article, Forbes defaulted on a $90 million credit line and was forced to sell off family assets, including a private island in Fiji and palace in Tangier, to satisfy its lenders.

 

The company made a dramatic leadership shift in 2010 when it replaced CEO Steve Forbes with Mike Perlis, the first non-family member to hold the post. The appointment of Perlis, with his experience at venture capital firm SoftBank Capital, spurred speculation that the company was making itself open to a sale. But Forbes has dramatically reduced its dependence on print by expanding its conference business and online ad revenue, in part by aggressively pursuing native advertising via its BrandVoice platform. That's helped put Forbes in a small clutch of publishers whose digital revenue is equal to or greater than print (Forbes reached that point this year, with digital contributing 55 percent of revenue.)

 

All that, plus its improved profitability (the company claims to be on track this year to have its most profitable year in six years), is likely to help Forbes command a much bigger price than the pittances that have recently been paid for other (money-losing) print properties that have recently sold, said media investment banker Reed Phillips of DeSilva + Phillips. "They probably also have strong showing from their digital revenues and believe that’ll be valued different from print," Phillips said. "I think this will be a really good indicator of how investors will value a property that has done a good job making a transition to digital.

 

Source: www.adweek.com