The New York Times Company has reached an agreement to acquire About, Inc., an online consumer information provider, from Primedia Inc. in an all-cash transaction valued at approximately $410 million. The acquisition is subject to customary regulatory approvals and is expected to be completed late this quarter or early in the second quarter.
About, Inc., through its Web site About.com, aims to provide "practical solutions for everyday problems." Its network of experts, known as guides, create Web sites on topics from personal finance to consumer electronics to history and geography. About's guides serve as a filter for information found on the Internet, create dynamic original content, and help users find the information they need.
According to Primedia, the purchase price of $410 million reflects a multiple of over 10 times About, Inc. 2004 revenues and a multiple of over 30 times About, Inc. 2004 segment earnings before interest, taxes and depreciation (EBITDA). Based on Times Company projections, the transaction price reflects a multiple of 23 times estimated 2005 EBITDA. The Times Company expects the acquisition to be accretive to earnings in 2007 and will be structured as a cash for stock purchase. For tax purposes, the Company plans to treat the acquisition similar to an asset purchase.
Under Times Company ownership, About will operate as its own distinct business division. The Times Company expects to enhance and expand the About.com content offering and improve the visibility of the About.com brand name. The Times Company also expects to market its products to the About.com user base.