No, that’s not missing a “million” after it. The 20-million circ. publication was sold for one hundred cents to OpenGate Capital. You can’t even buy an issue of TV Guide for that cheap!
It prompted me to honor the lower-micro-small-market with Kind Of A Small Deal, a one-time bonus edition of my deal profile column.
With enough leverage, even I could have afforded to take a look at this deal. (Watch out, OpenGate, I’m talking to lenders right now for my rival bid.)
Joking aside, this is a complicated transaction. Macrovision is keeping the business’ online assets. So, in which direction exactly will the print assets grow? The seller also will lend $9.5 million dollars to try to revive the obviously declining magazine. (It’s never stated explicitly but the price says it all.)
The deal is further complicated by the fact that I only see technology plays in OpenGates portfolio, and nothing resembling media experience. Then again, look at the firm’s strategy. OpenGate is cool with “EBITDA positive, negative or break even.” It goes on to say, “In short, if we think we can add value to an acquisition opportunity, then we’re interested.” Basically, they’re not ruling out a damn thing, including a magazine whose main function has been made obselete by the internet, shows like Entertainment tonight and your basic cable menu.
But hey, the firm apparently just launched a media and entertainment platform, and they have to be plugged into Hollywood with their HQ in L.A. And TV Guide does still have 20 million readers, according to the press release. Without a Web site, I can’t imagine how long that’ll last, but maybe OpenGate can ride it out. Hey, its going to have a better IRR than the last $1 investment any of us have made! (Mine was toward a coffee).
Read more the deal here.
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