Forbes Lands the Whale – July 2014 M&A Activity

Forbes landed the big fish, achieving an estimated $475 million sale price, after much skepticism that the company could find a buyer that was willing to ante up the $400 million that the company was seeking. The buyer, a Hong Kong-based investor group improbably named Integrated Whale Media Investments, apparently wanted to make sure that this one did not get away. According to Forbes’ own projections that were prepared for prospective buyers and circulated earlier this year, the company estimated that revenues in 2013 would wrap up at $144.6 million with EBITDA of $20.8 million. If true, the reported purchase price represents a whopping multiple of 22.8 times cash flow and more than 325% of trailing revenues. Clearly the global cachet of the Forbes brand was the value driver in this deal, and the price is stunning in comparison to the paltry multiples paid for most publishing companies in recent years. Since the exact terms of the deal are private, maybe it’s all one big fish story…

The newspaper publishing business continues to roil as the major players divest their print-centric operations in favor of other media. E.W. Scripps Company in Cincinnati merged with Milwaukee-based Journal Communications to form a combined broadcasting group with TV and radio stations in 27 markets that reach 18 percent of US homes. The newspaper operations of the two companies were simultaneously jettisoned to form a new company, Journal Media Group, which will publish newspapers in 14 markets. This deal follows on the heels of last month’s spinoff of Time-Warner’s printed publications; last year’s split of Rupert Murdoch’s News Corp. from 21st Century Fox; the just completed spinoff of the Tribune’s newspapers; and the announcement days later that Gannett was splitting in two. The major urban dailies appear to be mere boat anchors holding back the value that can be harvested from media companies when the printed product is thrown overboard.