Active Interest, F+W Swap Home, Art Magazines

In an unusual asset swap, Active Interest Media and F+W Media Thursday said the companies exchanged several art and log and timber home magazine properties without any cash consideration.

As part of the deal, AIM will acquire F+W’s log and timber group, Home Buyer Publications, which includes Country’s Best Log Homes, Log Homes Illustrated, Custom Wood Homes and Timber Illustrated magazines. AIM also will take over F+W’s Log & Timber Expo and the Log & Timber online network.

In exchange, F+W will acquire AIM’s Southwest Art, The Collector’s Guide and their respective online properties.

"The idea of swapping assets to strengthen the core markets of both companies makes enormous sense," Oakstreet Media CEO Tom Kemp told FOLIO:.  "While many, if not most, publishing/media companies have the strategic goal and talk a lot about portfolio management to focus on core markets, there is usually more talk than action. It is very difficult to divest non-core assets for enough net cash to compensate for the lost incremental cash flow of these assets. This is especially the case with high leverage balance sheets:  that is, it is difficult to get a deal done that is not dilutive to the current debt leverage."

According to F+W CEO David Nussbaum, the portfolio of art properties “reflects our vision to be media agnostic” and allows the company to focus on its core markets. For AIM, the deal “positions us for steady growth when the housing market rebounds,” president and CEO Skip Zimbalist said.

Following the deal, AIM will shutter Log Homes Illustrated and Timber Homes Illustrated. F+W will shutter Timber Homes Illustrated. Many of the employees associated with these products will be moved to other products within the companies, AIM COO Andy Clurman told FOLIO:.

"With economy down, the market just can’t sustain all of these products," he said. "This allows us to serve our advertisers better by not having them spread their money over more titles. Consolidation makes a lot of sense."

"It appears that Active Interest Media and F+W Media were able to ... intelligently execute a successful swap of assets that could be a win/win for both groups," said Kemp. "Both groups should be congratulated for overcoming the challenges of consummating this deal."

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