24.10.2005 20:05:00
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PRIMEDIA Plans to Explore the Separation of Its Businesses and Announces Management Changes
Under the plans currently being evaluated, the two entities wouldbe independent and have separate management teams. The transaction isanticipated to take the form of a tax free dividend of shares in thespun-off company that would be distributed pro-rata to all PRIMEDIAshareholders. The company intends to announce further detailsregarding this possible separation later this year and has hiredGoldman Sachs and Lehman Brothers, as advisers, and Simpson Thacher &Bartlett, as counsel.
In connection with this announcement, PRIMEDIA announced certainmanagement changes. Dean Nelson, currently Chairman of PRIMEDIA, willassume the role of President and Chief Executive Officer of PRIMEDIA.Kelly Conlin, currently CEO of PRIMEDIA, had decided to leave thecompany effective immediately as it pursues its exploration of theseparation.
"PRIMEDIA's Board of Directors has been intensely focused on howbest to unlock the value of our media assets," said Mr. Nelson."PRIMEDIA has made significant progress over the last three yearsstreamlining the business and reducing leverage. We believe theseparation of these segments into two distinct businesses is the nextlogical step in the clarification of our long-term business strategyand that this plan would lead to greater growth opportunities andultimately enhanced shareholder value."
Mr. Nelson continued, "The separation would both help to highlightthe unique qualities and values of these businesses for investors aswell as enable us to better focus and motivate the employees of eachcompany. PRIMEDIA's Consumer Guides is a rapidly expanding and highgrowth business. PRIMEDIA's Enthusiast Media and Education divisionalso has attractive long-term growth prospects and that generatesstrong free cash flow. Assuming the separation is completed, investorswill have a clear opportunity to participate in two pure-play mediabusinesses that will each deliver significant returns over time,specifically tailored to their investment objectives.
"On behalf of the Board and all of the employees at PRIMEDIA, Iwould like to thank Kelly for his dedication and contributions. Thecompany is certainly in a better position today than it was when Kellyarrived two years ago," said Nelson.
Kelly Conlin stated, "During my two years at the company, werefocused the organization on our core businesses, significantlydeleveraged by divesting non-strategic assets at very attractivemultiples and reinvigorated our commitment to editorial quality,innovative brand extensions and the launch of new products - allelements of a long-term growth agenda."
PRIMEDIA's Consumer Guides is the leading publisher anddistributor of free consumer guides with its Apartment Guide, AutoGuide and New Home Guide in the U.S. PRIMEDIA's Enthusiast Media isthe number one special interest magazine publisher in the U.S. withwell-known brands as Motor Trend, Automobile and Hot Rod. PRIMEDIA'sEducation unit is led by Channel One, the preeminent news and publicaffairs content provider reaching almost eight million teens in nearly12,000 middle schools and high schools across the country.
PRIMEDIA will host a conference call for investors and analysts onTuesday, October 25, 2005 at 8:30am EDT. To participate in the call,please dial (800) 207-0148 if in the U.S., or (719) 884-8877 ifoutside the U.S. The conference ID is 415552.
About PRIMEDIA
PRIMEDIA is the leading targeted media company in the UnitedStates. With 2004 revenue of $1.1 billion, its properties compriseover 135 brands that connect buyers and sellers through printpublications, websites, events, newsletters and video programs inthree market segments:
-- Enthusiast Media is the #1 special interest magazine publisher in the U.S. with more than 120 consumer magazines, 115 websites, 100 events, 10 TV programs, 340 branded products, and has such well-known brands as Motor Trend, Automobile, Creating Keepsakes, In-Fisherman, Power & Motoryacht, Hot Rod, Snowboarder, Stereophile and Surfer.
-- Consumer Guides is the #1 publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 49,000 locations.
-- Education includes Channel One, a proprietary network to secondary schools; Films Media Group, a leading source of educational videos; and Interactive Medical Network, a continuing medical education business.
Forward Looking Statements
This release contains forward-looking statements as that term isused under the Private Securities Litigation Act of 1995. Theseforward-looking statements are based on the current assumptions,expectations and projections of the Company's management about futureevents. Although the assumptions, expectations and projectionsreflected in these forward-looking statements represent management'sbest judgment at the time of this release, the Company can give noassurance that they will prove to be correct. Numerous factors,including those related to market conditions and those detailed fromtime-to-time in the Company's filings with the Securities and ExchangeCommission, may cause results of the Company to differ materially fromthose anticipated in these forward-looking statements. Many of thefactors that will determine the Company's future results are beyondthe ability of the Company to control or predict. Theseforward-looking statements are subject to risks and uncertainties and,therefore, actual results may differ materially. The Company cautionsyou not to place undue reliance on these forward-looking statements.The Company undertakes no obligation to revise or update anyforward-looking statements, or to make any other forward-lookingstatements, whether as a result of new information, future events orotherwise. All references to "Company" and "PRIMEDIA" as usedthroughout this release refer to PRIMEDIA Inc. and its subsidiaries.
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