Luxe Publisher May Not Get Such a Luxe Price
Curtis, who hired investment bank Goldman Sachs to handle the sale, with media bankers DeSilva & Phillips involved as co-brokers, told the Times that interest from private equity firms had reached a "fevered pitch," compelling him to relent and put the company up for sale.
CurtCo currently has about 14 magazine titles clustered around flagship luxury magazine Robb Report, which he bought in 2001. In 2003, Curtis formed a $100 million acquisition vehicle with private equity firms Weston Presidio and TD Capital.
One source with knowledge of the sale process says CurtCo’s EBITDA is "in the ballpark of $20 million." If Curtis should get his $500 million, that would create an astounding 25-times EBITDA multiple. "They’re looking for a high multiple," explains the source, "I don’t know who’s floating the price, but I think there’s a sense that the properties could command a premium price. Multiples go up for higher growth."
While CurtCo has experienced healthy growth, with 20 percent annual increases in profit margins and reaching the $100 million revenue benchmark a full year earlier than the expected five-year timeframe, others think the $500 million asking price is way out of line. "There’s no way that they’re going to get even remotely close to $500 million," says another source. "It’s a good business, they’ve done a good job of making it profitable. But the private equity guys, for better or worse, have to deal with actual math."