Wasserstein Acquires Penton for $530 Million
Will merge with Prism.
Penton Media, the once troubled trade publisher, has been sold to Wasserstein & Co., and will be merged with Prism Business Media, creating a new b-to-b giant, with revenue nearing $500 million.
The sale price was put at $194.2 million, plus assumption and payment of debt, putting the total value of the deal at $530 million, according to a statement from Penton released this morning.
The deal must be approved by Penton stockholders, and if approved, is expected to close in the first half of 2007. Penton shares, which have languished under $1 for years, increased slightly to $0.77 as of mid-morning.
"This transaction delivers outstanding value for all of Penton's stockholders," David Nussbaum, Chief Executive Officer of Penton, said in a statement. "The combination of Penton and Prism will create a company with the capital structure, talent, and infrastructure to continue on a very strong growth path."
The deal, if viewed by the total price, represents the largest M&A deal in b-to-b media since the $650 million acquisition of Hanley Wood by JP Morgan in May 2005.
It also establishes Wasserstein as one of the top three or four players in b-to-b media in terms of revenue. Wasserstein, together with its private-equity partners, also owns ALM and The Deal.
Who Takes Over As CEO?
The merger, if approved, raises the interesting question of who will run it. Nussbaum has run Penton since 2004, increasing EBITDA dramatically even as revenue has remained flat. At Prism, CEO John French has been at the helm since October 2005, producing growth on both the top and bottom lines. There was no indication at presstime who would run the company. Wasserstein vice chairman Anup Bagaria did not reply to an e-mail inquiry.
According to Wasserstein/Prism spokesman Lee Feldman, it's too early to answer the question of who will be the new company's CEO. Feldman says Highfields Capital Management and Lexington Partners are co-investors with Wasserstein in Penton, as they are in Prism, and their proportion of ownership in Penton is the same as it is in Prism.
The sale had been complicated by a deal with Penton's preferred shareholders to share proceeds of a sale with common shareholders. Under the plan, the allocation agreement would kick in if the net proceeds of the sale exceed $105 million.
Prism also announced today that it has purchased Conde Nast's Supermarket News for an undisclosed price. Prism said in a statement that the Supermarket New properties, which includes the Web site, Supermarketnews.com will form the basis for a new retailing group within Prism's management structure.
Current Supermarket News publisher Dan Bagan will join Prism as a senior vice president and continue to oversee the group. David Merrefield, editorial director for the group, also will stay on to oversee all editorial operations. The group's offices will transition to Prism's headquarters in New York City.