In Memo, Forbes Media CEO Mike Perlis Confirms Sale Exploration
Deutsche Bank hired to represent the brand.
A staff memo from Forbes Media president and CEO Mike Perlis reveals that the company is exploring a potential sale, confirming an earlier report out of Bloomberg.
Perlis says the company has hired Deutsche Bank to manage the process and that interest is expected from "numerous suitors" who've been floating inquiries this year due to the company's ongoing efforts in digital, licensing and events.
"The frequency and serious nature of these overtures have brought us to a decision point," says Perlis in the memo.
He says digital revenues are expected to increase 25 percent by the end of the year. Digital passed print for the first time this year, accounting for 53 percent of all ad revenue. The company's custom content solution, BrandVoice, accounts for 20 percent of that, says the company, up 10 percent versus last year.
The company just announced it is licensing the technology it built to support its contributor network platform‚ÄĒb-to-b media company ALM is the first customer, with others, including Hearst, AMI and Abrams media, in discussions.
Forbes Media and Perlis were also recent subjects of a profile by the New York Times. In the piece, Perlis emphasized the company was not for sale and he's received no pressure from private equity backers Elevation Partners, which took a 45 percent stake in Forbes Media in 2006 for a reported $237 million.That investment put Forbes at a $526 million valuation‚ÄĒsignificantly less than the $400 million it's reportedly seeking.
The magazine declined 12.3 percent in ad pages through the first three quarters of 2013, per PIB numbers, continuing a trend that has plagued Forbes, and the industry, for several years now.
Circulation has actually picked up over that time however. Each issue of the magazine reaches more than 930,000 readers, according to the Alliance for Audited Media. That's up from 913,000 in 2009.
The full memo:
So much has been accomplished recently, and we're very much in the spotlight these days.¬† We're seen as innovators with extraordinary business momentum.¬† This year is expected to mark our best financial performance in the last six years, strengthened by revenue growth in digital as well as licensing and conferences.¬† As a result of your tremendous work, we have received more than a few "over the transom" indications of interest to buy Forbes Media.¬† The frequency and serious nature of these overtures have brought us to a decision point.¬† We're organizing a process to test the waters regarding a sale of Forbes Media.¬† We have hired Deutsche Bank to represent us, and we expect interest from numerous suitors.
I'm proud to say that we've accomplished what no other traditional media company appears to have done: established a huge digital audience by efficiently creating quality content at scale, and we're innovating around new business models to maximize that relationship.¬† In the last three years, our unique visitors to Forbes.com have jumped from 12 million to 26 million, according to comscore worldwide.¬† Digital revenues are expected to increase over 25% by the end of the year.¬† In print, through September, we continue to be the share of market leader in our competitive set.¬† Our efforts have also focused on diversifying our revenue streams to complement our advertising-based businesses - and many of our initiatives have come to fruition this year.
I will share more details about the interest in our company as events unfold; however, I was eager to inform you before you hear about this news elsewhere.¬† If you receive any inquiries from the press, forward them to Mia Carbonell in Corporate Communications.
We will have an open conversation about our company at our next Town Hall meeting early next year.