Primedia buys Kagan World Media, establishes major new subsidiary.

Primedia's announcement this month that it has established a new subsidiary operation, Media Central, with the intent of becoming "the leading source of news about the media industry," has resulted in a greatly expanded role for Primedia in the newsletter, media and specialized information industry.

Chairman Tom Rodgers of Primedia, a targeted media company with nearly $2 billion in sales, announced on Jan. 4 that it is combining its 172 newsletters, magazines, web sites, conferences, databases and other products into a new subsidiary, Media Central.

It was Primedia's recent acquisition of Kagan World Media Inc., and its more that 40 high-priced newsletters and other products and consulting services, that set the stage for the establishment of the new subsidiary. The acquisition was paid for with Primedia stock.

"By virtue of a variety of transactions over the years, including our recent purchase of Kagan World Media," Rodgers asserted, "Primedia has gathered in one company, but in different corners of the company, the single best collection of information resources for people in the media business."

The properties under Media Central will include Simba Information, headed by Megan St. John, Folio: magazine and its related trade shows, American Demographics, Circulation Management magazine, along with all the publications and products of the Kagan firm.

Today the Kagan companies publish 40 newsletters, more than 60 reference reports, two international trade magazines, and an exclusive daily fax service delivering news and insights on broadband video, voice and data communications. It also organizes 20 annual conferences and provides strategic consulting and valuation services to a wide range of companies in the media and financial communities.

"The premise of selling to Primedia was to build the foundation of an integrated approach to cover the media business, coupled with the other B2B media properties that Primedia owns," said Paul Kagan. "This initiative puts this enormously strong portfolio of resources under one umbrella to execute the strategic design."

As part of the acquisition Paul Kagan became vice chairman of Primedia's venture capital investment arm and will continue to oversee many Kagan operations.

Kagan's newsletters include The Kagan Media Investor ($1,195/year), VOD Investor ($795), and Streaming Media Investor ($895).

The firm was founded in 1969 by Paul Kagan. He had been a securities analyst with E.F. Hutton in the media field. Kagan has more than 160 staff members located at its Carmel, Calif., headquarters and also has offices in Washington, Denver, London and Hong Kong.

Chairman of Media Central will be Steven Brill, founder of Brill's Content magazine and Contentville.com, whose company has a minority interest in the subsidiary. Brill was in trade publications when he founded American Lawyer and then an array of other publications and products, including Court TV.

Brill has exchanged a 49 percent interest in his company for a smaller percentage interest in Media Central.

It was just about two months ago that Primedia (NYSE: PRM) and About Inc. (NASDAQ: BOUT) announced an agreement which would result in the merger of the two companies, subject to shareholder approval. About Inc. is a leading online company in the delivery of niche content.

Under the terms of the deal, About Inc. shareholders would receive about 2.3 shares of Primedia stock for each share of About. The transaction was valued at $690 million. As of last Sept. 30, About had no debt and had $133 million in cash.