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Primedia pens portal pact with About.com

Publishing firm's shares plunge by 25% after deal

NEW YORK — Continuing its push online, Primedia, publisher of New York magazine and a host of specialty titles, said Monday that it will buy Internet portal About.com in an all-stock deal worth about $690 million.

Investors trashed the deal while company execs extolled it. “With this transaction, Primedia has been transformed. Niche is king,” said Primedia CEO Tom Rogers, calling the hookup a smaller-scale, niche version of AOL-Time Warner.

Primedia, which is controlled by buyout firm Kolberg Kravis Roberts, will match its varied print and video content with About’s 700 topic-specific guide sites and 10,000 associated experts. About’s sites deal with topics ranging from pregnancy, infertility, adoption and daycare to career planning and auto repair. Most subjects have a print or related counterpart at Primedia.

Deal calls for Primedia to hand About shareholders just over 2.3 Primedia shares for each About share, representing a hefty 49% premium to About’s Friday close. The $690 million value is based on Friday’s closing share prices of $15.25 for Primedia and $23.88 for About. Those numbers looked a lot different Monday, however, as Primedia shares plunged more than 25% to $11.38.

Shares of About, which has no debt and had $133 million in cash at the end of September, rose slightly by 0.79% to $24.06.

The partners also clinched a $72 million promotion deal for About within Primedia properties.