Change in debt market could hamper media deals

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Chicago—As Veronis Suhler Stevenson’s efforts to sell construction industry media company Hanley Wood drag on, speculation in the investment banking community holds that Canon Communications, which is a VSS private equity fund sold for a reported 12 times EBITDA (earnings before interest, depreciation, taxes and amortization) multiple, may have represented the peak in the current business media M&A cycle.

Shifts over the past several weeks in the debt market have made credit more expensive. The prevailing opinion holds that this shift is contributing to the delay in the Hanley Wood deal.

This delay is bad news for the business media M&A market in general—and in particular for Primedia’s efforts to sell its Business Magazines & Media unit, which includes Telephony and Registered Rep.

Also not boding well for Primedia is the preliminary reaction to its black book, which outlines the property to potential buyers and which was disparaged by some investment bankers.

"The offering was exceptionally poor," griped one banker, who spoke on condition of anonymity. This banker added, "Getting a double-digit multiple [for this property] is ridiculous."

—Sean Callahan

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