Entrepreneur Publishers May Go Public
Entrepreneur Group Inc.--publisher of Entrepreneur and other business magazines--could become a publicly traded company early next year and issue up to $10 million in stock, investment banking sources said Monday.
Entrepreneur Chairman Peter Shea acknowledged that he is discussing the possibility of taking the company public with the investment banking firm of L.H. Friend, Weinress & Frankson Inc. in Irvine.
But he added that no final decision had been made, though one investment banker close to the deal said the transaction was “100% sure.”
“We are in a growth mode and we are looking at different possibilities as to how we are going to finance that growth and one of those areas is the public arena,” Shea said.
Besides Entrepreneur, which has a circulation of 340,000, the company publishes Entrepreneurial Woman and New Business Opportunities, each with a circulation of 200,000, according to independent auditors. The company had $19.7 million in revenue last year; profits are not disclosed because the company is private.
Entrepreneur Group has not submitted any paperwork to the Securities and Exchange Commission that is required before making a public offering, though one investment banker said a filing was likely in the next 45 days.
Word that Entrepreneur is considering a public offering was met with mixed reviews on Wall Street.
“It’s a risky venture,” said Tom Delaney, publisher of the Delaney Report, a New York-based media newsletter. “The whole magazine marketplace is being buffeted and crippled by advertiser cutbacks.”
Delaney said he wondered how Entrepreneur could keep up the phenomenal growth necessary to attract investors.
Entrepreneur, however, is one of the few business magazines that has come through the recession in relatively good shape, retaining most of its advertisers and gaining new ones, including Ford Motor Co.
The magazine forecasts that it will have about 2,000 advertising pages through Dec. 31, about the same as last year. Both Entrepreneur and New Business Opportunities are profitable, and Entrepreneurial Woman should start making money in 1992, Shea said.
Earlier this year, Enquirer/Star Group, parent corporation of such national tabloids as the National Enquirer and Star, made a successful public offering of 20.5 million shares at about $17 apiece, raising nearly $350 million. Media analysts say many smaller publications are now thinking that they can do the same.
