Wasserstein to make 4.2x its money on Penton sale; MidOcean to see 3.5x

MidOcean Partners and Wasserstein & Co will post strong, but differing, returns for their investments in Penton.

The two private equity firms on Sept. 15 agreed to sell the professional information services company to Informa plc for $1.56 billion. MidOcean and Wasserstein will receive $1.46 billion cash (plus adjustments) and $100 million of Informa stock, a statement said. The transaction is expected to close in the fourth quarter.

Wasserstein, which owns a minority of Penton, will make 4.2x its money with the sale and will retain a 10 percent stake in the company, a source familiar with the transaction said. The deal is generating a 33 percent IRR for Wasserstein, the person said.

MidOcean holds a majority of Penton and will see a 3.5x return with the sale, a second source said.

“We’re pleased,” said Anup Bagaria, a Wasserstein co-managing partner and co-chairman of Penton, said. “We invested a lot and made a lot of acquisitions to really grow the nonprint, trade-show side. … We’ve had great growth these last five years.”

The investment dates to 2005, when Wasserstein acquired Prism Business Media from Primedia. The PE firm then bought Penton Media in early November 2006 for a reported $194.2 million and merged it with Prism. In February 2007, MidOcean acquired a 50 percent stake in the combined Prism/Penton entity.

Wasserstein’s return is higher because this will be the second time the firm will be paid, a source said. The firm received proceeds from MidOcean when it acquired its 50 percent stake in 2007, a source said.

New York-based Penton, which emerged from bankruptcy in 2010, has transformed from a business-to-business media publisher into an information-services company.

In 2005 print comprised 60 percent of Penton’s business; that’s dropped to about 10 percent of total profits, a third source said. The company has done 13 acquisitions in the past decade to boost its non-print businesses, the third person said. Penton employs 1,100 people in the U.S., according to a presentation.

Penton “is one of the very few B2B media companies that successfully transitioned into a much more valuable company since 2010,” said Reed Phillips, chief executive and a managing partner of the media-and information-focused investment bank DeSilva + Phillips LLC. “They did it by putting more emphasis on events, digital media and information products.”

Penton generated $140 million of EBITDA and sold for 11x. Philips said it was the company’s events business, which has seven of the top 250 largest trade shows in the U.S., that attracted Informa.

MidOcean’s investment came from its third fund, which closed on $1.25 billion in 2007.

Wasserstein used its second fund, which collected $480 million in 2002, to invest in Penton. The firm’s third pool collected $400 million in 2014. Wasserstein has been marketing for its fourth fund, which has a $750 million target, Buyouts reported in August 2015.

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