The deal for Thomson Media, publisher of Bond Buyer and American Banker, is expected to close by the end of the year.
Industry observers viewed the deal as a triumph for Thomson Corp., which pulled the unit off the market two years ago when the offers weren't satisfactory. Media reports had estimated the deal would be in the $250 million to $300 million range for Thomson Media, which had $170 million in revenue and estimated operating cash flow of $30 million in 2003.
The purchase price was viewed by some as a vote of confidence for b-to-b media. "It's an indication of a strong rebound in the M&A market for media companies and for b-to-b in particular," said Reed Phillips, managing partner at media investment bank DeSilva & Phillips.
Baran Rosen, president of M&A company Whitestone Communications, was less ebullient, saying, "I'm sure the purchase price is being based on the full year 2004. ... So it's not that much of a premium."
Investcorp, which was founded in 1982 in Bahrain, said it will keep the current Thomson Media management team, led by CEO Jim Malkin, in place.
This is the first media investment for Investcorp, which in the past has focused on real estate and retail brands, such as Tiffany's and Josten's.
"It wouldn't be the first time that a first-time investor [in media] has paid dearly to learn the business," said Robert Crosland, managing director at AdMedia Partners. "It will be fascinating to see what they do with it."