A peHUB report said Forbes Media may not attract the interest of private equity firms despite having Elevation Partners as its existing investor. The New York-based publisher has put itself on the auction block and tapped Deutsche Bank as adviser for the transaction. Bloomberg News reported that Forbes Media has a price tag of at least USD 400 million. It was in 2006 when Roger McNamee's Elevation Partners bought a 45% stake in the publisher for USD 240 million.
Citing sources, the peHUB report said private equity companies will most likely pass on the publisher this time. One of the private equity executive interviewed said, "Their valuation expectations would preclude PE given the multiple of cash flow." The second private equity executive said the financial problems faced by the publisher will not gain the interest of private equity. Citing a story published on Fortune two years back, the report said the deal with Elevation has given Forbes Media with debt. Forbes has not also generated the ROI expected by Elevation.
However, another source told peHUB that it was not fair to conclude that Elevation failed on Forbes Media since it still needs to divest the publisher. After Forbes Media gets sold, Elevation will most likely get better returns, the person added. Still, another source said it would not be possible for Forbes Media to sell for USD 400 as the business of magazine publishing is highly compromised.
The sources said Thomson Reuters or S&P Cap IQ or some other strategic buyer would be most interested in Forbes Media. They added that it was also possible for a billionaire to acquire the publisher. Amazon.com's Jeff Bezos which had recently purchased The Washington Post and Warren Buffet's Berkshire Hathaway which had already bought newspapers before may also be interested in Forbes Media, the report said.
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