Primedia To Merge With About Inc.
Tuesday, October 31st 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” Primedia Inc., publisher of Seventeen, Modern Bride and New York magazines, agreed Monday to merge with online content provider About Inc. in a stock deal worth $690 million that will combine old and new media.
Officials of both companies described Primedia's acquisition of About as a textbook example of old media merging with new media to forge an alliance that will help marketers and advertisers reach millions of new consumers.
``This is a perfect match in terms of the parallels of what About does in the online world and what we do in the off-line world,'' Primedia's chairman and chief executive Tom Rogers said at a Monday news conference.
Under terms of the deal, About shareholders will receive 45.2 million shares of Primedia, or 2.34 Primedia shares for each About share. The $690 million price tag was based on Primedia's closing stock price on Friday of $15.25 and About's closing price of $23.88.
Shares of Primedia fell $4, or 26 percent, to $11.25 in afternoon trading on the New York Stock Exchange following Monday's announcement. About's stock rose 12.5 cents to $24 on the Nasdaq Stock Market.
Primedia publishes about 220 magazines on topics as diverse as pregnancy and hot rod cars. About operates more than 700 Web sites with an equally diverse range.
About's chairman and chief executive Scott Kurnit said marketers and advertisers will be able to expand their access to a wide array of consumers given the range of publications offered by a combined Primedia/About.
And since both companies are recognized as leaders in covering niche topics, marketers can be certain that they will be reaching their target audiences, he added.
``What people are passionate about is what they dip into their pockets and spend their money on,'' noted Rogers.
Rogers, who joined Primedia a year ago with a mandate of moving the company into new media, said the acquisition accelerates by several years Primedia's ability to penetrate the online media world.
Since the two companies' business models complement one another and don't overlap in many areas, Rogers said he doesn't expect the combination to face any regulatory hurdles. ``We're creating a pure content and marketing play,'' he said.
Primedia, a unit of leveraged buyout firm Kohlberg Kravis Roberts & Co., had revenues of $1.7 billion in 1999 but still lost money. About, like most Internet startups, has yet to generate a profit since its inception in 1996.