Primedia to Buy Emap's Magazine Business


Mar 11, 2001
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July 2, 2001

Primedia to Buy Emap's Magazine Business


Primedia Inc., the publisher of New York, Modern Bride and more than 100 specialty magazines, announced today that it was acquiring the United States magazine business of Emap P.L.C., the British publisher.

Primedia said it would pay $505 million in cash and give Emap warrants to buy two million shares of Primedia at $9 a share. The warrants have been valued by Merrill Lynch & Company at about $10 million.

This afternoon, Primedia's shares were trading up 51 cents, or 7.5 percent, at $7.30 on the New York Stock Exchange.

The move will make Primedia the second-largest magazine publisher in the United States after the publishing division of AOL Time Warner Inc., in terms of magazines published.

Emap publishes more than 60 consumer titles in the United States, mostly enthusiast titles including Motor Trend, Guns & Ammo, Hot Rod and Skin Diver. The company also publishes Teen magazine, and FHM, a ribald men's magazine that is not included in the deal. Emap also owns several cable television shows, Web sites and live consumer events, including the Gravity Games, sports games aimed at the teenage market that are broadcast on NBC every summer.

With the Emap properties, formerly called Petersen Publishing, Primedia will publish about 280 consumer and business-to-business magazines.

Primedia, which is controlled by the buyout firm Kohlberg Kravis Roberts, has tried to build a powerhouse of niche magazines from Fly Fisherman to Soybean Digest. Its specialty focus may have helped to insulate it from the slowdown in advertising many other magazine publishers have felt deeply, one of the main reasons it wanted to buy the Emap titles.

The deal will give Primedia strength in the automotive enthusiast market, adding Motor Trend to its Automobile magazine, and in the teenage market, adding Teen magazine to its Seventeen and teenage-oriented Web sites.

The new group will be overseen by John Loughlin, the chief executive of the consumer magazine division.

Executives who participated in an auction of the company last month said that Emap had been seeking $600 million for the company. Primedia is buying the magazine group just three years after Emap acquired the group for $1.5 billion. Primedia has bid on the properties in the past, losing out in the 1996 bidding, when the company was known as K-III Communications.
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