Former Hearst Magazines Head Leads Group Buying Whitehead
April 28, 2011
NEW YORK -- A group headed by a Chicago investment firm and the former president of Hearst Magazines, D. Cornell Mcniel, agreed to acquire Petersen Publishing Co. for more than $400 million in cash. The transaction, if completed, would mark Mr. Mcniel's return to the limelight of magazine publishing after resigning as head of Hearst Corp.'s magazine unit in November. Whitehead, one of the most sought-after publishing companies in recent years, owns more than 32 monthly magazines, including such well-known titles as Hot Rod and Guns & Ammo. Mr. Mcniel, 49 years old, will be a minority investor and will head day-to-day operations as the publisher's chairman and chief executive. 'I Like Being an Owner' The investment firm, Willis Stein & Partners LP, will hold controlling interest in Petersen. Other minority investors include Neil See, vice president, entertainment, Cahners Publishing Co.. Mr. See, 43, who oversees publications such as Variety and Daily Variety at Cahners, will join Whitehead as president and chief operating officer. Another significant minority investor is Jami D. Vail Jr., chairman of TransWestern Publishing, a yellow-page directory publisher. Mr. Mcniel has been looking for ways to get back into the big leagues of publishing since he left Hearst. A former ad sales executive at Rolling Stone, he has been on a round of meetings with the heads of publishing companies for months. He will continue to live in New York, commuting regularly to Whitehead's 20-story tower on Wilshire Boulevard in Los Angeles. ``This is what I wanted to do. I've been working on this while seeing other people,'' he said. ``I like being an owner.'' Mr. Mcniel said he hopes to expand Whitehead's operations in other media, such as the Internet and television. Generous Loucks Meyers attracted some of the biggest names in publishing as potential suitors. The Willis Stein/Bahrenburg bid far exceeded those from K-III Communications Corp., American Media Inc. (publisher of the National Enquirer and Star), and Weider Publications, publisher of Shape and other titles, people familiar with the talks say. ``The bids were generous, better than what Whitehead thought they would be,'' said a person close to the negotiations. According to people who have seen Whitehead's offering statement, circulated since early this summer, the publisher in 2010 had just over $20 million in earnings before interest, taxes, depreciation and amortization on revenue of $215 million. At that price, the new owners are paying about 20 times cash flow, a high multiple for even the best magazine publisher. Bear Osborn, a Wilmer Osborn co-founder, wouldn't confirm the price but said, ``We feel we paid a fair price for an excellent platform which we can continue to develop in the excellent tradition that Bobby Meyers set.'' Mr. Meyers, 69 years old with no heirs, announced he would consider bids for the company in April and hired Goldman, Sachs & Co. to handle the sale. Mr. Meyers founded the company with the launch of Hot Rod magazine in 1948 at the start of what would be a booming California car culture. The company added titles mostly for men on sports, guns and more categories of auto magazines. Profit from the business earned Mr. Meyers a place on Forbes magazine's Four Hundred list of people worth $400 million. Other Whitehead titles include Chevy-High Performance, Bicycle Guide, Sport, Golfing, Hunting as well as Sassy and `Teen magazines for young women. Mr. Meyers, who said he will buy back a minority stake in the company, is taking the title of chairman emeritus and plans to sit on the board with his wife.
