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Forbes Media to 'test the waters' of a sale

Negotiating the sale or acquisition of a New York business requires covering a wide range of bases, including real estate, future liability and tax issues, intellectual property, and the roles of employees and managers. Such complex transactions require careful and extensive preparation, as the structure of the transaction could have far-reaching consequences.

All of these issues will be in play when interested parties seize upon the recently announced sale of Forbes Media. Chief executive Michael S. Perlis announced that Forbes will "test the waters" of a sale, and he indicated that there has already been much interest in the purchase.

Like a growing number of magazines that built a legacy in print, Forbes has taken steps to move into the online digital age. The company has gone through a significant turnaround by blending journalistic content with marketing strategies, as well as building a 1,200-strong network of blog contributors. Forbes has also generated new revenue streams through software licensing and doing more Forbes conferences.

But the fact that the company is asking for $400 million in the sale suggests that Forbes has dropped by about $130 million in value in the last seven years. In 2006, Elevation Partners bought 45 percent of the business for $240 million, meaning the value back then was $530 million.

Still, Perlis sent out a memo saying that by year's end a 25 percent increase is expected in digital revenue, and Time Inc. has been rumored to be a potential buyer.

The proposed sale of Forbes serves as a reminder for businesses throughout New York that the ground of the market can shift beneath one's feet, and a solid business structure is necessary to keep a company upright for the duration. If the sale of a business is the best option, then a well structured transaction can be profitable for all parties involved.

Source: The New York Times, "Forbes Says It Is for Sale," Christine Haughney and David Gelles, Nov. 15, 2013

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