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Original Post:
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| ALM sale looks like a journalism plus |
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| Thu, July 05, 2007 |
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The sale of American Lawyer Media announced today sounds like good news for the country's largest legal journalism company. The buyer is Incisive Media, which was taken private last December by APAX Partners. More to the point, one of its properties is Legal Week, a respected, AmLaw-style trade paper covering the business of law in Britain and beyond. For years, it's served as a significant competitor for legal-business news and law firm advertising.
Here are stories on the sale by Bloomberg and Reuters, plus the press release, which says that ALM CEO Bill Pollak will join Incisive's board and stay with the company.
The sale price was $630 million for ALM's group of 30-plus newspapers and magazines (including The American Lawyer, National Law Journal, and Legal Times). That's well shy of the $1 billion price tag that Bruce Wasserstein was long rumored to covet for his rollup of legal news and information properties (see links in this previous post about the pending sale). Without knowing ALM's current P&L -- but based on past disclosures that it was marginally profitable, and sometimes operating in the red, with heavy debt service -- and based on the new disclosure that ALM's 2006 revenues were $200 million, it looks like a respectable but not dazzling return after 10 years of investment.
Bloomberg's Mark Herlihy and WSJ Law Blog's Peter Lattman repeat a number that's made the rounds in the shorthand summaries of Wasserstein's rein at ALM: that he bought the company for $200 million in 1997. Not quite. I don't have the old financials at hand -- I'll look for them on Edgar when I get a chance (ALM for a time had to disclose its financials with the SEC because of its publicly secured debt) -- but if memory serves, Wasserstein paid roughly $300 million for the old American Lawyer Media (sans Court TV) and the old New York and National Law Journal publishing group, plus more for the Legal Tech trade shows, a Philadelphia-based legal publisher, and a heavy investment to start The Deal (which then was spun off to a separate pot of leverage money).
Back to journalism: ALM's journalists should be heartened by Incisive's ability to publish quality legal journalism. If a plain old private-equity buyer had won the auction, it would be more likely to slash and burn its way to bigger margins. And if a strategic buyer -- Thomson/West, Reed/Lexis, other legal publishers, or Reuters -- had been the winner, then there's no telling how the mother ship might have changed and cut to reshape the company's products to fit the strategy. Change, no doubt, could have been more radical and less indulgent of ALM's journalism quality.
This gives Legal Week a big U.S. footprint, and a prestige glossy in The American Lawyer to rival its competitor Legal Business (with which the old ALM once had an arm's length business relationship). Here's hoping that the two companies work together to do bigger, better reporting on cross-border law and law firms. And that they keep their eye on the quality-journalism ball, and not just on figuring out new ways to fleece big law firms for advertising and database-licensing fees.
Update: I guess my memory's not so bad. According to SEC filings, the original Wasserstein purchases in 1997-98 (net of the startup of the Deal, which isn't part of today's announced purchase anyway) totaled $297 million: $203 million for the old NLP company (New York and National Law Journals), $63 million for the old ALM, $20 million for the Legal Intelligencer's parent company in Philadelphia, and $11 million for Legal Tech). The company has made some smaller acquisitions and has grown organically, but those original purchases form the core of today's $630 million sale.
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Posted at 10:37 AM
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