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More dealings in the wonderful world of finance

We know some readers are still getting excited about the finances of the IRIS Group – but spare a thought also for Incisive Media, which owns Legal Week in the UK and American Lawyer Media (which runs the LegalTech shows) in the US. Our thanks to Media Week + for this information…

“B2B magazine publisher Incisive Media is reportedly close to sealing a debt-for-equity swap led by the company’s management. Media Week reports that the Computing publisher’s management, led by global CEO Tim Weller, are set to buy an intial 10% stake, potentially rising to 24%. The company is currently 59% owned by PE firm Apax Partners and other shareholders include Ingenious Media and Caledonia Investors.

“The company also reveals that Incisive’s lenders, led by Royal Bank of Scotland, turned down a takeover bid from AIM-listed media investment firm Critical Information Group last week, which was joined by Peter Bazalgette as a non-executive director in June. Incisive’s UK and Asia CEO James Hanbury says that was a “sign of the banks’ confidence that they know we’ve got a good business and strong management”. He doesn’t expand on the debt-for-equity deal, saying only that “there is a deal being worked on at the moment.” Incisive breached one of its banking covenants in February, it has been closing magazines and in March it asked staff to take one week’s unpaid leave.”

Here's a copy of Tim Weller's memo to staff from earlier this year…


You may have seen this morning’s coverage about Incisive Media in
the FT which has mentioned that the UK side of the Company is not
expected to meet the current tests on its banking covenants. I would
like to update you on where we are and to reassure you by explaining
what this all means.

Incisive Media, as you know, is a great business with leading brands
in its chosen markets but we are currently under revenue pressure due
to an unprecedented set of economic circumstances and their impact on
our end markets. As a result, the UK 2008 profits dipped below the
level agreed with the bank when we took on our loan in 2006 as part of
taking the company private.

It is important to note that the issues we face in our markets and
with our lenders are no different to those faced by a myriad of other
businesses in the current climate (in the media sector and other
sectors). It is also important to emphasise that the issues being
talked about in the press are purely financing issues centred on the UK
Company’s balance sheet and the amount of debt the UK business has. The
US has a separate financing agreement. Our businesses continue to be
very profitable and cash generative at the operating level. In that
sense, it is business as usual and it is important that we remain
focused and committed to our day-to-day roles and concentrate on
hitting our 2009 budget.

We expect the Group to emerge from these difficulties in a stronger
position with a sound platform for future growth as the market recovers
and we resolve our financing issues. As James, Bill and I have
mentioned before and experienced in the past, the nature of our
business means that just as it can suffer in the downturn as
advertisers tighten their belts so it will bounce back quickly when
things turn for the better, as they surely will.

We are confident that our shareholders and the lenders will be
supportive of the Group while it addresses the UK financing issue. We
are driving the process pro-actively to get to a satisfactory solution
and are working with an experienced advisory team to assist and guide
us through the process.

I reiterate again that Incisive Media is a sound business, certainly
with challenges, but with everyone working together we will emerge
stronger from this.

I will keep you updated as the process moves forward. In the meantime, thank you for your support and continued hard work.

If you have any questions please don’t hesitate to contact me.