Prism purchase of Penton creates b-to-b powerhouse

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In a deal that greatly expands Bruce Wasserstein's clout in b-to-b media, Prism Business Media announced Nov. 2 that it had agreed to buy Prism Business Media in a deal valued at $530 million.

The deal, which is expected to close in the first half of 2007, includes a cash payment of $194.2 million and the assumption or repayment of about $336 million in debt. It represents the largest M&A transaction in b-to-b media since the $650 million acquisition of Hanley Wood last year by an investment consortium led by JP Morgan.

Prism is owned by U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co.; Highfields Capital Management; and Lexington Partners. Wasserstein's fund also owns b-to-b media companies ALM and, along with Rustic Canyon Ventures, The Deal LLC.

Several bidders expressed interest in Penton after it went into play in July. In the final few weeks before the deal was announced, there were rumors that the bidding had been winnowed to Apprise Media and Wasserstein & Co. Yet unlike Wasserstein's deal to acquire New York Magazine in early 2004, in which it swooped down at the 11th hour, the firm was active on the Penton front from the get-go. Media investment bank DeSilva & Philips represented Prism in the Penton deal.

John French, CEO of Prism, said in a statement: "Together, Penton and Prism provide a compelling combination of leading brands and integrated media products for business readers and marketers across a wide diversity of vertical industry segments." He would not offer additional comments about the deal beyond the press release, said Lee Feldman, a spokesman for Prism.

A person familiar with the transaction said Prism is expected to integrate the Penton properties into its portfolio.

Prism has 70 b-to-b titles in 19 vertical markets, including agriculture, construction, electrical, financial services, meeting and event planning, real estate and transportation. Penton has 50 b-to-b titles in 15 categories, including mechanical systems/construction, manufacturing, economic development and enterprise IT.

Both companies have expanded their business this year. In September Prism acquired SpeedNews, which provides news and information for executives in the aviation industry. This month marks the debut of the IWCE/MRT Wireless Summit, which is being marketed by Prism's Mobile Radio Technology.

In October Penton's Lodging Hospitality debuted LHTV, an online, streaming video offering for the lodging industry. And in September, Penton's New Hope Natural Media acquired NPIcenter, an online information resource for professionals in the nutraceutical, nutritional, dietary supplement, cosmetic and food industries.

"The companies match up strategically extremely well," said Tom Kemp, a managing director at media bank Veronis Suhler Stevenson and former chairman-CEO of Penton. "They're in very similar markets, but they're more complementary, not competitive."

At press time, it had not been disclosed whether Penton CEO David Nussbaum would remain with the company after the deal closes. Nussbaum was named CEO in June 2004.

On the same day it announced it was acquiring Penton, Prism said it had acquired the assets of Supermarket News from Fairchild Publications. Financial terms were not disclosed. The magazine, founded in 1952, produces the Supermarket News Whole Health supplement, which covers the organic, whole health and wellness markets. M

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