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ALM and Incisive – what happened next

One of our US correspondents was in touch to ask what was this story (from last week) all about…

ALM, formerly the US operating unit of Incisive Media,
officially announced its new operating structure and name. Effective
today, the assets Incisive Media purchased through the acquisition of
ALM (American Lawyer Media) in 2007 for $630m will become a separately structured, independent company
operating once again under the ALM brand, pending regulatory approval.
ALM will continue to be majority-owned by funds advised by Apax
Partners. Royal Bank of Scotland (RBS) will swap a portion of its existing ALM
debt for a 49% equity stake in the company and become a minority owner
of ALM. Following a transition period, ALM will no longer share operations or
infrastructure with Incisive Media, although the two companies expect to
continue to collaborate on content sharing. William Pollak will continue to serve as president & CEO of ALM.
The senior management team of the company will remain unchanged.

Apart from the obvious comments – why did they ever drop the ALM brand in the first place and should Incisive now change its name to In(de)cisive Media – there lies behind this announcement a story of what happens when big, private equity funded deals, hit a recession. Here's the inside skinny…

Incisive Media, a business-to-business publisher, is being split
into two after breaching its banking covenants late last year. Apax Partners, its private equity owner, will keep control of
the ALM business in the US, while banks will take
over the UK arm. According to the FT, ALM's operations have proved more resilient to the downturn than Incisive’s more
cyclical magazine and conference operations in the UK (which include Legal Week magazine and the Strategic IT Forum which is held each spring in Spain/Portugal). Apax has agreed to inject $15m of fresh equity into ALM as part of the debt-for-equity swap deal with RBS.  Apax’s
stake will fall from 71% to 51%, with RBS owning the rest and
having the right to one board seat. ALM’s management,
led by William Pollack, are being issued fresh equity.