In its latest move to expand in the American magazine business, Gruner & Jahr USA, a division of the German media conglomerate Bertelsmann, said Tuesday it is buying Fast Company magazine from real estate developer and media magnate Mortimer B. Zuckerman.
Both companies are privately held and declined to disclose a purchase price for the business monthly, which has grown quickly since being founded five years ago. But the New York Daily News, which Zuckerman owns, reported Tuesday that the price could be as high as $510 million, including a $150-million future payment if certain performance targets are met.
At that range, the price could exceed the $475 million that Time Inc., the magazine division of Time Warner Inc., agreed to pay Tribune Co. for Times Mirror Magazines, a group of 21 titles that includes Golf, Field & Stream, Ski and Outdoor Explorer.
The Fast Company acquisition marked the second major deal for Chief Executive Dan Brewster, who took over G&J; in May with a mandate to make over the company's portfolio of stodgy family-oriented titles such as Parents and Family Circle.
G&J; bought Inc. magazine from private investors in June for a reported $200 million. Like Fast Company, Inc. is based in Boston, but Brewster said the deals were not driven by cost savings from combining back-office operations but on creating a new business publishing unit within G&J.;
"It's a platform from which we plan to build," Brewster said Tuesday. "We have a critical mass to launch properties."
Executives at Bertelsmann, which already owns the U.S. book publisher Random House and major publishing and broadcasting assets in Europe, have said they would spend what it takes to make G&J; a major player in the U.S. magazine market. Brewster said he is working on two other acquisition deals and has two magazine projects ready to launch in the coming months that were developed within the company.
Last month G&J; announced a separate deal to make over the struggling McCall's magazine by bringing in talk show host Rosie O'Donnell as a publishing partner and new face for the magazine. The deal follows the example set by Oprah Winfrey and Martha Stewart, both of whom have successful magazines associated with them.
The sale of Fast Company leaves Zuckerman with two major media properties: the New York Daily News, a major tabloid, and the weekly news magazine U.S. News & World Report. Last year he sold the Atlantic Monthly to David Bradley, publisher of the National Journal, for a price reported to be about $10 million.
Fast Company was founded five years ago by Alan Webber and William Taylor, two former editors of the Harvard Business Review. The two men said they plan to stay at the magazine for at least five years.
Fast Company has ramped up quickly since being launched, and as of June 30 had paid circulation of 538,000, according to the Audit Bureau of Circulations. One early expansion move being contemplated under the new owners is the launch of an edition in Europe, where G&J;'s German parent company already has a major magazine operation.