Handy Primer On The BusinessWeek Sale ProcessJon Fine
As the deadline for final bids nears, though, I thought I’d compile the key facts from those pieces in this post.
THE KNOWN PLAYERS: Seven parties are interested enough to have made a preliminary (that is: nonbinding) bid for BusinessWeek. They all have attended presentations—or, in the case of Bloomberg LP, they are attending a presentation on Monday, Sept. 14—given by BusinessWeek executives, and they have access to detailed financial and operating information in order to perform due diligence before submitting final bids.
They are New York Magazine owner Bruce Wasserstein; Fast Company and Inc. owner Joe Mansueto; and four private equity firms: Platinum Equity, Warburg Pincus, OpenGate Capital, and ZelnickMedia. The seventh player is Bloomberg LP, which despite having previously rebuffed McGraw-Hill in talks regarding a deal for BusinessWeek, apparently got very interested very quickly and is expected to meet with BusinessWeek management Monday, Sept. 14.
It is not clear if all of those seven companies will place final bids, but as of late last week executives familiar with the situation indicated that OpenGate Capital, Bloomberg, ZelnickMedia and Wasserstein were all acting like companies getting ready to make offers. I should hasten to add that some of those might change their minds—I will note they did so here if they do—and that some of the other remaining players might well be serious about bidding too. I just haven’t gotten enough data on them to know one way or another.
THE UNKNOWN PLAYERS: Around three other parties also submitted prelimiary bids and attended management presentations. At least one of them is a non-US based firm. I haven’t yet tracked down who any of them are.
THE DEADLINE. Bids are due on Tuesday, Sept. 15. But it often happens in these situations that if a serious-sounding bidder that wants another day to fine-tune their offer, said bidder doesn’t get the door slammed shut in their face.
THE FINANCES: The financial data shows steep fall-off in BusinessWeek’s performance. Although the “black book”—the packet of financial data that was provided to a broader array of potentially interested folk in June—claims BusinessWeek lost around $20 million in 2008 and is projected to lose slightly less in 2009, those figures do not include key corporate overhead charges like rent. When those are added back in, losses for both years top $40 million. In 2006, print ad revenue for BusinessWeek topped $109 million; this year, according to the financial data provided to potential buyers, it’s projected to be $59.7 million. Total BusinessWeek revenue in 2006 was $181.5 million, but is expected to be $135.6 million in 2009—-a 25% falloff.
THE LAYOFFS: Contrary to what the New York Times' Stephanie Clifford reported in a story in Monday's Times, there was no announcement last January that McGraw-Hill would lay off a quarter of BusinessWeek's editorial staff. And there was no layoff of this size in 2008 or 2009.
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