Vitamin king Joe Weider is putting his family-owned magazine company – which includes Shape, Men’s Fitness, Muscle & Fitness and Flex – on the block.
The family hopes to fetch at least $350 million for the Woodland Hills, Calif.-based Weider Publications, executives close to the process said.
The sale would mark the biggest publishing deal since Reader’s Digest Association paid $760 million to acquire Reimman Publications earlier this year – but that was a negotiated sale with one buyer, not an auction.
Weider has retained the white-shoe investment firm of Rothschild Group to try to maximize the price. Preliminary bids for the seven-magazine group are due today.
“There is no doubt the Weiders want to sell it, but they are positioning it as a hunt for additional investment just in case they don’t have a successful auction,” one knowledgeable source said.
The company is believed to have cash flow of about $27 million this year, and it is projected to have about $31 million on revenue between $150 million to $200 million, according to executives familiar with the company’s financials.
“They’ve been down this road before, but it has broken down over price,” one source said.
While the flagship Shape and Muscle & Fitness are profitable, other titles, such as Fit Pregnancy and Muscle & Fitness Hers, are money drainers; and Natural Health, which they acquired, is an underperformer.
One other factor that might dampen enthusiasm: the magazines derive a big segment of their advertising from mail order health care products, vitamins and dieting aids – which have come under increased scrutiny from federal regulatory agencies.
It is believed that most major publishing houses would kick the tires, including the Newhouse family, which owns Conde Nast and Fairchild; Hearst, which has shown little interest in men’s magazines under Cathie Black; Gruner & Jahr, a part of Bertelsmann, which has had myriad problems and shakeups lately; and AOL Time Warner, which bought the male-oriented titles now known as Time4Media two years ago from Tribune Co.
American Media, the supermarket tabloid company that is backed by Evercore, also would like to buy the magazines to broaden the base of the National Enquirer, Star and Weekly World News.
Financial players are also expected to enter the bidding because the seven-title company could provide an instant publishing platform. The investment fund controlled by Veronis Suhler Stevenson & Associates; Windstar Partners, which has backed Efrom (Skip) Zimbalist III; and Nautica Partners, which has backed Neal Vitale in the past, are all expected to take a look.
The Weider empire was founded before World War II when bodybuilder Joe Weider, then in his 20s, founded Your Physique magazine. He remains chairman of the holding company, Weider Health & Fitness.
A nephew, Eric Weider, is CEO of the holding company. Russell Denson is the president and CEO of Weider Publications.
“Clearly it’s kind of a sleepy company,” said consultant Mike Lafavore, a former editor-in-chief of Men’s Health, which competed with Men’s Fitness. He is not involved in the bidding. “The whole point of buying them is because they’re seen as underexploited assets,” he said.
Company representatives from Weider did not return calls by press time.
The unit that is now on the block does not include the publicly traded Weider Nutrition International, based in Salt Lake City, which reported sales of $311.1 million and a net loss of $7.5 million for the fiscal year ended May 31.
The Weider family still controls a big stake in that company.