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|  | JUNE 27, 2005
By Jon Fine G+J Turns Its Last Page in the U.S.It sells Inc. and Fast Company, its last American magazines, to Morningstar chief Joe Mansueto for a fraction of what it paid in 2000Joe Mansueto, chairman-CEO of Chicago-based investment research firm Morningstar (MORN ), has successfully nosed out a runner-up bid from The Economist Group to acquire Inc. and Fast Company from Gruner + Jahr USA Publishing. Executives familiar with the matter said the deal, which was handled by New York's AdMedia Partners, was for about $34 million in cash and the assumption of subscription-related liabilities at the magazines. Speculation had earlier put the deal's value at about $40 million plus these liabilities. The transaction was finished late on June 24 (see BW Online, 6/20/05, "A Buyer for Fast Co. and Inc.?"). HANDS-OFF OWNER. G+J had purchased the titles, in two separate transactions, in 2000 for about $540 million. But now, according to executives involved with the sale process, Fast Company is running seven-figure losses in yearly bottom-line terms. Should anyone still seek a cautionary tale about the illusory treasure of the dot-com boom, the evaporation of over half a billion dollars worth of value for the two magazines that occurred under G+J between 2000 and 2005 is painfully instructive. In a phone interview on Saturday, Mansueto declined to comment on the deal's financial aspects. "These are two incredibly powerful brands," says Mansueto. "They will thrive in a more nimble, entrepreneurial setting." Mansueto will keep both magazines in New York and hold onto their existing management teams. He says there are no current plans for layoffs. Mansueto also intends to be a hands-off owner: "Morningstar is my No. 1 priority.... I'm relying on the management teams to drive the business." Last month Morningstar went public, and Mansueto's 30 million shares represent a majority stake in the company. Morningstar's stock closed on June 24 at $26.87. SELLING OFF TITLES. Mansueto, 48, also owns 50% of Time Out Chicago -- via another deal brokered by AdMedia -- and was an unsuccessful bidder in the auction in which Tribune Co. (TRB ) purchased Chicago magazine in 2002. "I wouldn't preclude another [media] investment, but I'm not going out knocking on doors," says Mansueto. The deal marks the end of G+J's publishing ambitions in the U.S., which ramped up in 1994 when it acquired Family Circle, McCall's and Fitness from the New York Times Co. (NYT ) in 1994 for $325 million. After that, virtually every major initiative G+J undertook failed, including the top-of-the-market deals for Inc. and Fast Company and the disastrous remaking of McCall's as Rosie, a magazine wreathed around the persona of onetime talk-show host Rosie O'Donnell. That partnership with the celebrity ended in late 2002. A bruising and unsuccessful court battle against O'Donnell followed in 2003, as did revelations that G+J overstated circulations figures at Rosie and its now-shuttered teen title YM. Last month, G+J, whose parent company is headquartered in Germany, announced it would sell its other magazines -- Family Circle, Fitness, Parents, and Child -- to Meredith Corp. for $350 million.  Fine writes the Media Centric column for BusinessWeek Edited by Beth Belton
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