Would-Be Buyers View BusinessWeek Books
Platinum Equity, the Beverly Hills-based private equity firm, is among the companies meeting with BusinessWeek management to view detailed presentations and financial data for the 80-year-old magazine. Earlier this week, executives familiar with the matter say, representatives from private equity firm Warburg Pincus met with management for such a presentation. Spokesmen from both companies declined to comment. Evercore Partners, the investment bank that is handling the sale exploration process for BusinessWeek's owner, The McGraw-Hill Companies (MHP), earlier this year sold the San Diego Union-Tribune newspaper to Platinum.
More than half a dozen potential bidders are expected to meet with management, executives say. At least one is a non-U.S.-based company, though its identity remains unclear as of this writing.
A McGraw-Hill spokesman declined to comment beyond a previous statement that the company is exploring strategic options for BusinessWeek. In an earnings call this week, McGraw-Hill Chairman and CEO Harold "Terry" McGraw III similarly declined to elaborate on the company's prior statements.
On the SidelinesAs previously reported, other companies scheduled to meet for management presentations include OpenGate Capital and financier Bruce Wasserstein, who through multiple companies owns New York Magazine, The Deal magazine, and a substantial chunk of business publisher Penton Media. Spokespersons for OpenGate Capital and Wasserstein declined to comment.
David Bradley, owner of The Atlantic Monthly and the National Journal and considered by some to be a potential bidder for BusinessWeek, confirmed in a brief e-mail exchange that he is not pursuing a deal. Bradley joins news and publishing luminaries Bloomberg, Time (TWX), and Thomson Reuters (TRI) in standing on the sidelines, despite the fact that those companies own properties and infrastructure that could be used to trim significantly the costs of operating BusinessWeek.
The financial data provided to potential buyers or partners are not for the faint of heart. While certain performance metrics detailed in the initial information provided by the company offer some positive signs—the average revenue figure BusinessWeek netted per print-ad page increased slightly from 2006 thru 2007 and 2008, and is forecast to grow again in 2009—the ad revenue decline is severe. Print-ad revenue exceeded $109 million in 2006 but is projected to fall to $59.7 million in 2009, which represents a decline of more than 45% for BusinessWeek's largest revenue stream. Total revenues, including those from BusinessWeek's Web site and offshoot products such as its six-times-a-year magazine SmallBiz, will decline from $181.5 million in 2006 to a projected $135.6 million in 2009, according to the data.