Birmingham, Ala.-based Hoffman specializes in magazines that cater to women. Their titles include “TeaTime,” “Southern Lady,” “Just CrossStitch” and “Sew Beautiful Quarterly.” Hoffman is best known for its magazine focused on Deen, who is the host of three shows on the Food Network, including Paula’s Home Cooking.
All of Hoffman Media was put up for sale in April with indications of interest due a few weeks ago, sources said. It is not clear what the company will fetch.
DeSilva + Phillips and McColl Partners are advising on the process.
“Paula Deen is a good property,” says a buyout exec. “It’s a huge success for the company.”
Phyllis Hoffman Depiano, Hoffman’s president and CEO, founded the company in 1983. It currently has about $40 million in revenue, says a different PE source, who passed on the deal.
Hoffman Media has received several bids from buyout shops although it’s not clear which ones. “They were pleasantly surprised by the level of PE interest,” the buyout exec says.
The sale is the latest in the media industry. Earlier this month, Newsweek finally found a buyer with Sidney Harman, the current chairman emeritus of Harman International. Modern Luxury Media, a regional magazine publisher, is also in talks to sell itself to the Dickey Family, which controls Cumulus Media.
UPDATE: Hoffman has EBITDA of less than $10 million, says one banker. While the company publishes the Paula Deen magazine, Hoffman does not own the brand and must license it, the source says. Hoffman is seeking bids of 10x EBITDA, the banker says.
PE firms typically don’t do well with smaller consumer publishers and few roll ups in the space have worked well, the banker says. The source pointed to Sandler Capital Management’s buy of the Crafts Group from Primedia in 2006 for $132 million (Sandler sold the unit last year to Boston Ventures for an undisclosed amount, which then instituted layoffs), and ABRY Partners acquisition of F+W from Providence Equity Partners in 2005. ABRY then sued Providence, claiming the seller knew that F+W had misstated its financials. ABRY and Providence ended up settling before coming to trail.
“Hoffman is a solid business,” the source says. “It’s just not well suited to private equity.”
Officials for Hoffman Media could not be reached for comment.