Bids had been expected to come in at around $10 million, but peHUB has learned that the publisher received multiple offers closer to $30 million. Two bidders remain, with a final decision expected later this month.
We’re not yet sure who made the final auction round, or if Modern Luxury founder and ex-CEO Michael Kong remains in the mix. Private equity suitors have included Platinum Equity and Castanea Partners, while Berkery Noyes is managing the process.
Modern Luxury was riding high in 2007 when its then-owner, Shamrock Capital, sold its 60% stake to Clarity Partners. At the time, Modern Luxury, had $16 million of EBITDA, but it has since declined significantly. Currently, it has nearly 30 publications in 13 major markets including Angeleno, Manhattan and Interiors.
Kong, who had owned 40% of Modern Luxury, had been trying to get a proposal in place. He was ousted after the magazine defaulted on $120 million in debt. Modern Luxury is currently being controlled by its lenders, GE Business Financial Services and NewStar Financial.
Second round bids were due in late June. Modern Luxury was seeking proposals of $20 million-plus. Several banking and buyout sources doubted the magazine publisher could pull in such high offers. They were apparently wrong.
“That’s not high,” one source said of Modern Luxury’s roughly $30 million price tag. “Two years ago, this company sold for $243 million.”
Another source said that Modern Luxury has a sound business model, while the luxury and advertising sectors are rebounding. “The customers are coming back,” the person said. “Not many [magazines] have their platform, reach and scope.”
Officials for NewStar, Castanea and Kong declined comment.