Memo: Forbes Media will ‘test the waters’ on sale of company
Confirming a report from Bloomberg News, Forbes Media President and C.E.O. Mike Perlis sent a memo to staff this morning that says the company is looking at offers.
Bloomberg reporters Alex Sherman, Jeffrey McCracken and Edmund Lee broke the news this morning that the company was working with Deutsche Bank to find a buyer. Sources tell Bloomberg Forbes Media is looking for $400 million.
That suggests a lower valuation than the company saw seven years ago, when Elevation Partners paid $240 million for a 45-percent stake in the company, according to the report.
The memo to staff does not specify an asking price, and characterizes the sale effort as a 'test [of] the waters' for a buyer.
The company has been run by a Forbes family member since its founding in 1917, most recently by two-time presidential candidate Steve Forbes.
Forbes Media has been singled out for praise by media watchers for its early and agressive embrace of native advertising, a now controversial revenue stream. But ad revenue has shrunk by 45 percent since 2008, according to the Bloomberg report.
The company's namesake magazine saw a 12.3 percent decline in ad pages over the first nine months of 2013 compared to the same period a year ago, according to the Publishers Information Bureau.
You can read the full text of Perlis' memo to staff here:
So much has been accomplished recently, and we're very much in the spotlight these days. We're seen as innovators with extraordinary business momentum. This year is expected to mark our best financial performance in the last six years, strengthened by revenue growth in digital as well as licensing and conferences. As a result of your tremendous work, we have received more than a few "over the transom" indications of interest to buy Forbes Media. The frequency and serious nature of these overtures have brought us to a decision point. We're organizing a process to test the waters regarding a sale of Forbes Media. We have hired Deutsche Bank to represent us, and we expect interest from numerous suitors.
I'm proud to say that we've accomplished what no other traditional media company appears to have done: established a huge digital audience by efficiently creating quality content at scale, and we're innovating around new business models to maximize that relationship. In the last three years, our unique visitors to Forbes.com have jumped from 12 million to 26 million, according to comscore worldwide. Digital revenues are expected to increase over 25% by the end of the year. In print, through September, we continue to be the share of market leader in our competitive set. Our efforts have also focused on diversifying our revenue streams to complement our advertising-based businesses - and many of our initiatives have come to fruition this year.
I will share more details about the interest in our company as events unfold; however, I was eager to inform you before you hear about this news elsewhere. If you receive any inquiries from the press, forward them to Mia Carbonell in Corporate Communications.
We will have an open conversation about our company at our next Town Hall meeting early next year.