Simpson Thacher is representing PRIMEDIA Inc. in connection with the proposed sale of its Enthusiast Media division to Source Interlink Companies, Inc. for approximately $1.18 billion in cash. As part of the proposed transaction, Source will assume the obligation to make certain earn-out payments relating to Enthusiast Media’s Automotive.com division. The proposed transaction is subject to customary closing conditions and is expected to close in the third quarter of 2007. Certain shareholders of PRIMEDIA Inc. affiliated with Kohlberg Kravis Roberts & Co., which hold a majority of the outstanding common stock of PRIMEDIA, have unanimously consented to the proposed transaction.
PRIMEDIA’s Enthusiast Media business is the #1 special interest magazine publisher in the U.S. with a portfolio of well-known niche magazine titles and content brands including Motor Trend magazine, Automobile magazine, Hot Rod magazine, Lowrider magazine, Soap Opera Digest and Soap Opera Weekly magazines, Power & Motoryacht magazine and, Surfer and Snowboarder magazines. Source Interlink Companies is a leading marketing, merchandising and fulfillment company of entertainment products, including DVDs, music CDs, magazines, books and related items. AEC Associates, an affiliate of The Yucaipa Companies, a Los Angeles-based private investment firm, owns approximately 34% of the outstanding common stock of Source Interlink Companies.
The Simpson Thacher team working on this deal includes: Gary Horowitz, Katie Sudol, Shalini Aggarwal and Soo Chung (M&A), James Cross and Josh Buhler (Credit), Beth Understahl (Employee Benefits), Marcy Geller and Peter Rosen (Tax), Lori Lesser and William Ferullo (Intellectual Property), Mike Isby (Environmental), and Scott Dyer (Labor).