Cramer scores $87M deal
JIM
Cramer, host of CNBC’s Mad Money, will have a little more of that now as his financial news company, TheStreet, has agreed to sell its two largest divisions, The Deal and BoardEX, to Euromoney for $87.5 million.
But the remaining company will be a shadow of its former self and could be sold or go private, industry observers say.
The employee head count is expected to drop from just over 500 employees down to 75 once the deal officially closes — expected early in 2019.
About 300 people in Chennai, India, 75 in London and a good number in New York who work on the two business-to-business units being sold will move to Euromoney.
The remaining TheStreet people primarily work on Cramer-led paid subscription media including Action Alert Plus, Real Money and Retirement Daily as well as the adsupported news service, which is challenged in a highly competitive market.
“They’ll probably have a special dividend, which will make Cramer even richer,” said one source. Cramer had been criticized for generously reimbursing himself with a $3.5 million package even as the company was stuck in low-growth or cutback mode in recent years. “Maybe they’ll use some of the $87 million to take themselves private,” the source offered.
Moelis & Co, which brokered the latest deal and an earlier $33.5 million sale of RateWatch to S&P Global in June, has been retained to “explore strategic options” for the rest of the company.
CEO David Callaway said he will step down from his $530,000-a-year job once the deal is completed.
“The time is right for me to step down,” said Callaway. “I’ll miss everyone, especially the journalists.”
Chief Financial Officer Eric Lundberg will also assume the CEO job and Margaret de Luna, who was running the consumer-oriented news business, will be the president and COO of the remaining units.
While the selloffs could hasten TheStreet going private, the deal was too good to pass up — since it is more than triple the $28.3 million TheStreet paid in two separate transactions to acquire the businesses.
TheStreet acquired The Deal, which tracks mergers and acquisitions for Wall Street professionals, for $5.8 million in 2012 from Wasserstein & Co. BoardEx, an extensive data base of business execs, was acquired in 2014 for $21 million in cash and $1.5 million in debt.
CEO search
Headhunting firm Egon Zehnder was picked by the Gannett board to search for a successor to CEO Robert Dickey.
Dickey, 61, said Wednesday that he planned to step down on May 7, 2019.
He’s had a rough tenure as he wrestled with wrenching changes in the industry. Dickey became CEOin 2015 and successfully oversaw the spinoff of the broadcasting division into a company called Tegna.
He bought online market ReachLocal for $156 million to increase the digital push. But he also added the Milwaukee Journal par- ent company Journal Media Group for $280 million and North Jersey Media Group for $40 million in 2016.
He instituted the USA Today Network as a way to integrate its flagship paper more closely into the other 109 papers owned by the nation’s largest newspaper chain.
Locally, he instituted deep and controversial cuts at the Westchester and Rockland newspapers and the North Jersey Media Group, which includes The [Bergen] Record.
Delayed, man
For a second time in recent months, High Times Holding said it has extended the deadline for its crowdfunded IPO — from Nov. 30 to Jan. 31, 2019.
The company, which needs to raise at least $14.7 million before it can trade on a public exchange, said it is getting closer to its goal, reporting it has raised $13.2 million from 15,000 shareholders thus far.
More important, it has apparently gotten a reprieve from one big debt holder — the original founders who sold majority control of High Times magazine and the cannabisevents business to private equity firm Oreva Capital, headed by CEO Adam Levin.
They were still owed $28.5 million, but agreed to take a 25 percent hair cut and exchange the remaining $18 million debt for equity. But they have an out if the company still has not begun trading on a public exchange by Jan. 7.
Take a powder
American Media Inc. has agreed to give $3 million in advertising to MusclePharm, a protein-powder supplement p maker, in exchange for more than 920,000 shares of common stock in the publicly traded company. AMI Chief Executive David Pecker called the deal “an extraordinary partnership.” The supplement maker was closely associated with Arnold Schwarzenegger, as a shareholder and ad pitchman, but he terminated his involvement with the company in 2016 after it came under fire from a number of lawsuits alleging deceptive claims in its ads. All but one of the suits have been settled.