Macmillan to Sell 4 Units to KKR for $400 Million

Macmillan Inc. said Thursday that it plans to sell four business units to the New York buyout firm of Kohlberg Kravis Roberts & Co. for about $400 million.

KKR recently lost out to Maxwell Communication Corp. in a months-long bidding contest for Macmillan. Early last month, Maxwell purchased the New York publishing and information services giant for about $2.7 billion.

Macmillan, now headed by British publishing magnate Robert Maxwell, identified the four business units as Macmillan Book Clubs Inc., Gryphon Editions Inc., Intertec Publishing Corp. and Webb Publishing Co.

Webb Publishing is the agricultural magazine division of Maxwell Communication. The other units are subsidiaries of Macmillan.

John Walsh, an analyst with Fitch Investors Service Inc., said the sale of the four units probably does not represent a shift in Maxwell’s focus on publishing but is merely a move to reduce his debt.

Maxwell incurred a huge debt through his takeover of Macmillan and his $750-million acquisition, announced in October, of Dun & Bradstreet Corp.’s Official Airline Guides business. In addition, on Tuesday Maxwell said he agreed to buy BRS Information Technologies, a Latham, N.Y., information services company. Terms of that sale were not disclosed.

In recent interviews, Maxwell, chairman of Maxwell Communication, has stated a desire to further expand his publishing empire by acquiring more U.S. book, magazine and newspaper publishers.

Maxwell “is not selling off the main textbook operations (of Macmillan),” Walsh said. “The only thing that surprises me is that he’s getting so much for those four operations.”

Maxwell and Macmillan have executed letters of intent to sell the units to KKR, the companies said in a statement announcing the sale.