Mr. Pecker said he plans to launch Spanish-language versions of Weider's titles along the lines of "Muscle & Fitness En Espanol," and "Shape En Espanol."
"This is something we will be aggressively doing," thanks in part to the infrastructure American Media's Spanish-language Mira has in place, Mr. Pecker said. "We already have 43 Latino markets targeted."
suitors muscled out
The deal for Weider, an agreement for which was reached late Nov. 26, is not expected to be final until January, said Weider's President-CEO Russell Denson. American Media beat out several potential suitors for Weider, including former Primedia CEO William Reilly's Aurelian Communications, and bids from private equity players Veronis Suhler Stevenson and Cypress Capital, which had teamed up with former Times Mirror CEO Jason Klein. As part of the deal, the Weider family will pick up a small stake in American Media.
The deal doubtless comes as a relief to Mr. Pecker, who, with longtime financial backers Evercore Partners, had come up short in two of the bigger magazine auctions of the past two years: 2000's deal for Times Mirror Magazines and 2001's deal for Emap USA. Executives who have seen the financials said Weider was projected to post cash flow of around $27 million on revenues of around $135 million for 2002. An executive familiar with the situation said the sale price represented a multiple of around 13 times the last 12 months' earnings before interest, taxes, depreciation and amortization.
While coveted properties like Weider traditionally garner healthy multiples, the fact the price ended up significantly higher than observers expected indicates how aggressively American Media pursued it. Evercore's financing was augmented by J.P. Morgan Securities and Bear, Stearns & Co.
Launches from Mr. Pecker's company have a checkered history. A planned weekly car title, Auto World Weekly, dropped the last word from its cover and now appears monthly. An Us Weekly/In Style hybrid called Style 24-7 has been silent following a test launch last year. Mira, launched in 2000, has yet to have its circulation or ad pages audited, but Mr. Pecker said its newsstand sales of 200,000 per issue made it the best-selling Spanish-language newsstand title. (Time Inc.'s People En Espanol averaged newsstand sales of 112,000 for the first six months of 2002, according to Audit Bureau of Circulations.)
Mr. Pecker said he had "no intentions of selling any" of Weider's seven titles, which include Shape, Flex and Men's Fitness. American Media is based in Florida, but Mr. Pecker said "we don't have plans" to move Weider's operations, which are largely based in Woodland Hills, Calif.
Mr. Pecker's tenure at magazines, which includes a stint at the head of Hachette Filipacchi Magazines, has led to his emergence within the industry as an aggressive and blunt-spoken executive with an enviable grasp of the numbers underpinning the business. As such, he touted his company's multimillion dollar spending on infrastructure, from systems to distribution arm Distribution Services to ready the company for additional deals.
That infrastructure, Mr. Pecker said, "could take on another 50 to 75 additional magazines."