Primedia, New York, and About.com
on Oct. 30 agreed to merge in a stock deal worth $690 million at the time of the announcement. Standing in front of a banner emblazoned "There's something about Primedia," Primedia's yearling CEO Tom Rogers told news conference attendees the deal creates "the single largest player in niche media." Primedia currently publishes 250 magazines; on the consumer side, the vast majority, with titles such as Muscle Mustang, serve tightly targeted markets. About.com runs sites on more than 700 topics moderated by expert guides. Mr. Rogers said the deal will be positive on the earnings before interest, taxes, depreciation and amortization side in the first 12 months, with revenue synergies and cost savings resulting in incremental EBITDA increases of $45 million to $50 million in that time frame. Of $23 million in revenue synergies the company foresees, Mr. Rogers said, the largest chunk of that will come from Primedia niche titles' endemic advertisers being "applied" across About.com's site network. Scott Kurnit, founder and chairman of About Inc., will become Primedia's chief Internet officer and continue to run About.com. In extremely heavy trading volume, Primedia's stock nose-dived $4.50 to a 52-week low of $10.75 this afternoon. Though Greg Kile, president-CEO of Pegasus Research, was positive on the deal, he attributed the sell-off to concerns over the deal's dilutive aspects.
Copyright October 2000, Crain Communications Inc.