Primedia sells business unit to private equity firm for $3853m.

Following a three-plus month search for a buyer, owner KKR has sold Primedia's (New York) business information unit to PBI Media Holdings, Inc. (Rockville, MD), a unit of U.S. Equity Partners (New York), an equity fund sponsored by Wasserstein Perella & Co., for $385 million in cash. The deal is expected to close in the fourth quarter. Wasserstein outbid a number of other firms, including The Blackstone Group (Boston, MA), Spectrum Equity Investors (Boston, MA) and Apprise Media (New York), now the owner of Canon Communications (Los Angeles, CA). Credit Suisse First Boston advised Primedia in the sale.

Primedia Business Information (Overland Park, KS), formerly Intertec Publishing, includes 70 publications, more than 100 Web sites, 25 events and 50 directories and data products in 21 industry categories. Magazine properties in the deal include 10 agricultural titles ("Beef" and "Western Farm Press"), 11 entertainment technology titles ("Mix," "Millimeter", "Broadcast Engineering" and "Video Systems") eight transportation titles ("American Trucker," "Fire Chief" and "Fleet Owner") and six titles in the meetings category ("Association Meetings," "Medical Meetings" and "Special Events"), as well as such other well-known magazine as "American City & County," "Catalog Age" and "Electrical Marketing." Primedia said the Business Information unit had revenues of $224.8 million in 2004, an increase of 1.5 percent over 2003. Through March, the unit took in $53.5 million, down from last year's $54.9 million first quarter performance. The unit's EBITDA was $37.4 million in 2004, including Primedia's Ward's automotive properties that were not part of the sale. The sale price represents a multiple of 10.6x trailing EBITDA and a multiple of 1.5x trailing revenue.

Wasserstein had been active in pursuing high profile, on-the-block b-to-b media companies over the past year, including Thomson and Canon Communications, but came up short in the bidding. Other Wasserstein media holdings include ALM and "The Deal."

In late 2003, chairman Bruce Wasserstein's New York Media Holdings bought Primedia's New York magazine after a fierce bidding war. Investments in U.S. Equity Partners' portfolio includes, GlobeSt.com, American Lawyer Media--the largest newspaper and magazine publishing company for the legal industry, Law.com, ElementK (formerly known as ZD Education), Real Estate Media and The Deal LLC.

"The turnaround of the Business Information segment, delivering five quarters of revenue growth after twelve quarters of decline, is a tribute to the dedicated employees of this business and also to PRIMEDIA's ability to deliver on its operating strategies," said Kelly P. Conlin, President and CEO of PRIMEDIA. "This transaction not only allows us to realize the value of this turnaround, but also to increase our focus on the segments of our business, particularly Enthusiast Media and Consumer Guides, that can be superior sources of long-term value creation."

In February, Primedia sold About.com, the Web portal it had purchased for $690 million in stock in 2000, for $410 million to The New York Times Co. Previously, Conlin said that a divestiture of Primedia Business would de-leverage the company and enable it to concentrate on its three other business units, enthusiast media, consumer guides and education. "Our two largest segments, Enthusiast Media and Consumer Guides, have embarked on an aggressive strategy to invest behind the opportunities in each business," Conlin said.