Cleveland, OH – Prism Business Media Holdings signed an agreement on November 2 to acquire Penton Media in a deal that was valued at $530 million and was expected to close in the first half of 2007.
The deal will go down in history as one of the nation’s largest b-to-b media transactions in the past 11 years. Other notables include the $9.7 billion acquisition of VNU NV by Valcon Acquisition BV in May 2006; the $900 MIL purchase of Advanstar Inc. by DLJ Merchant Banking Partners in 2000; and JP Morgan Partners’s purchase of Hanley Wood for $650 million in May 2005.
The companies announced the bare bones of the transaction with unanswered questions about the next steps, including who will run the combined companies, to come later.
Cleveland-based Penton’s portfolio includes 40 industry magazines and some 80 trade shows and conferences, including the highly successful Natural Products Expo events, Supply Expo, Nutracon and the Comfortech RoadShow Series. Prism’s current B-to-B assets include 71 magazines, 17 industry trade shows such as Waste Expo, Annual Conference for Catalog & Multichannel Merchants, Club Industry, Coal Prep and International Wireless Communications Expo, plus 170 e-newsletters covering 20 industry sectors.
“This transaction delivers outstanding value for all of Penton’s stockholders,” said Penton CEO David Nussbaum. “The combination of Penton and Prism will create a company with the capital structure, talent, and infrastructure needed to continue on a very strong growth path.”
Prism declined direct comment on the transaction; however issued a statement predicting a bright future. CEO John French called the new alliance “a compelling combination of leading brands and integrated media products. Both companies share a tradition of success, innovation and customer service that provides a solid foundation for the future,” French added.
The acquisition involves a $194.2 million aggregate consideration payment to Penton stockholders and assumption and payment of anticipated debt at the time of closing that would push the deal’s total value to $530 million, the companies said.
Penton had been reportedly saddled with a debt load reported at more than $300 million earlier this year when the company brought Credit Suisse Securities aboard to explore strategic moves for the company. Credit Suisse was Penton’s financial adviser in the transaction while Ropes & Gray provided legal counsel. Prism worked through DeSilva & Phillips, Morrison Cohen and Jones Day. Financing sources included J.P. Morgan, UBS and GE Commercial Finance.
The deal had its roots in tony Manhattan, where Primedia was acquired last year by U.S. Equity Partners II, an investment partnership consisting of Wasserstein & Co., Boston’s Highfields Capital Management and Lexington Partners. One of the first changes was a new moniker for the company: Prism Business Media.
Prism is owned by U.S. Equity Partners II, LP, an investment partnership sponsored by Wasserstein & Co., LP, and by co-investors Highfields Capital Management and Lexington Partners. Wasserstein & Co. is headed by New York investment banker Bruce Wasserstein who is chairman and CEO of mergers-and-acquisitions firm Lazard Ltd. and whose growing publishing empire includes New York magazine. Wasserstein’s B-to-B media investments are varied: ALM (formerly American Lawyer Media), The Deal, and a piece of Hanley-Wood.