By Richard Morgan
May 22, 2006

World Publications LLC, a travel and luxury-lifestyle publisher, traded financial sponsorship for a strategic partner Monday, May 22, in an estimated $70 million deal that managed to satisfy everybody.

"We're the platform from which they'll grow," Terry Snow, the founder and CEO of Winter Park, Fta.-based world publications, said of his 50-50 partnership with Stockholm-based Bonnier Magazine Group. "They're ambitious about their goals for the U.S."

Snow's new partner, a division of 200-year-old yet still family-owned Bonnier AB, is one of Scandinavia's largest media companies. Revenues exceeded $2.5 billion last year from operations in print, broadcast, online and business information.

By buying into World Publications, a 20-title publisher dedicated to such passions as eating, sailing and gardening, Bonnier hopes to build on a U.S. beachhead that currently generates $90 million in annual sales. "The plan is to get us to $500 million within the next decade or so," Snow said.

Bonnier's teaming with Snow permits the exit of Boston Ventures Management Inc., which in January 2002 took a minority stake in World publications. Company revenues more than doubled over the course of Boston Ventures' backing - driven, in part, by the acquisition of six additional titles during those 4 1/3 years.

"They have been an excellent investment for us," said Boston Ventures managing director Elizabeth Granville-smith. Her Boston- based private equity firm, which informed World Publications of its exit intentions earlier this year, is a well-known media sponsor that has bought and sold stakes in assets ranging from Motown Records to the National Enquirer.

In constructing the current deal, Snow and Boston Ventures came to terms with a Bonnier team that retained Mark Edmiston, a managing director of AdMedia Partners Inc., as an outside financial adviser.

Edmiston was no stranger to World Publications, having two years ago bickered the sale of three Island Media titles to Snow's company. His handling last year's sale of Grupo Editorial Expansion, Mexico's No. 2 magazine publisher, to Time Inc. also gave him experience in the sort of cross-border deal that's bringing Bonnier to the U.S.

Boston Ventures turned to the local office of Choate, Hall & Stewart LLP for legal advice. Snow retained his usual firm, Breslow & Walker LLP, to represent his legal interests.

No one who worked on the deal would assign a dollar amount to it, although a metric often used for such properties is a little more than 1 times sales. Yet the $50 million that metric implies for the 50% of World Publications assigned to Bonnier could be light by as much as $20 million.

Reasons justifying a greater-than-standard premium include: an extremely healthy run rate in World Publications' revenues; the new strategic partner's desire to crack the U.S. market; and the insulation from economic vagaries accorded high-end specialty books.

In a phone interview, however, Snow dismissed formulaic valuations as insufficiently "complicated." Each of the 20 titles in his stable, he said, not only has different growth potential but contributes "a varying degree of profitability."

Yet Snow did confirm his new partner would provide ample firepower for additional acquisitions, including, possibly, also-affluent properties such as the Robb Report, Worth and ShowBoats International Magazine that CurtCo Media Labs LLC put up for auction last month. "We just finished this deal," he said, "but, yes, we'd be interested in looking at CurtCo if given the opportunity."

The decision to partner with a strategic operator rather than a financial player should be considered a preference rather than a necessity. Snow allowed, after all, that a host of buyout houses had indicated interest in picking up where Boston Ventures left off.

"[But] we never got to serious talks with any of them, because we liked the great opportunity we had with Bonnier," he said. "It's family-run, has a long-term view and wants to take us to the next level in publishing."

Then, confirming a contingency he insisted won't occur till "long past my retirement," Snow added that Bonnier also obtained the eventual right to increase its World Publications stake to a majority if not total ownership.