New York—Ziff Davis Media announced Thursday that it has agreed to sell the assets of its Enterprise Group to Insight Venture Partners for about $150 million in cash. Insight Venture Partners is a New York-based private equity and venture capital firm that focuses on software and Internet investments.
The deal is expected to close in the third quarter. Enterprise Group produces publications, online content and events aimed at the tech industry. Its assets include Baseline, CIO Insight, eWEEK, baselinemag.com, cioinsight.com, channelinsider.com, deviceforge.com, eweek.com, microsoft-watch.com and webbuyersguide.com. It also has a database of 3.5 million business and technology users.
Enterprise Group employees will remain in their current locations in Boston, New York and San Francisco, the company said.
Robert F. Callahan, chairman-CEO of Ziff Davis, said in a news release: “Insight Venture Partners has exciting plans to continue to pursue growth opportunities in this rapidly transforming technology media environment.”
The deal does not include Ziff Davis’ two other main divisions: the Consumer/Small Business Group, which includes flagship PC Magazine, and the Game Group.
The deal “is an important, delayed first step to the winding down of Ziff Davis Media,” said an industry observer who requested anonymity. “It also means more pressure to come to a resolution on the balance of the business.”
Ziff is still saddled with about $390 million in debt. Even after accounting for the sale of the Enterprise Group—subtracting $10 million based on how the group will perform financially the rest of the year—the question is “can Ziff realize enough net proceeds of the other two divisions to cover the remaining debt of $250 million?” the observer asked. “If not, it’s either some sort of settlement with shareholders or bankruptcy court.”
This person added that Ziff “now has a much smaller business to service the debt. It’s really in the same position as before. The sale doesn’t solve any problems because the interest on the debt keeps on clicking away.”
In the 12 months ending March 31, the Enterprise Group had revenue of $78.8 million and $13.8 million in EBITDA revenue.