Tuesday, November 23, 2010

It seemed like a good idea at the time...media investment firm Quadrangle closes

When they were riding high -- before the recession and before the problems with the Securities and Exchange Commission, the Quadrangle Group was considered a world-beater when it came to buying and capitalizing on media properties. But, according to a story in MediaDailyNews, the company's acquisition of lad mags Maxim, Stuff and Blender from Dennis Publishing USA in August 2007 was the start of a long tumble.
By some estimates, Quadrangle peaked and began to decline after the acquisition of Alpha Media, publisher of lad mags Maxim, Stuff and Blender, from Dennis Publishing for $245 million. This highly leveraged transaction, coming not long before the global credit crunch, resulting from the subprime mortgage meltdown, soon went sour.
Stuff and Blender were closed amid steep declines in ad pages, Kent Brownridge resigned his post as publisher in August 2008, and in November 2008, creditors including Cerberus Capital Management and Credit Suisse revealed that Alpha had violated debt covenants. In July 2009, Alpha and its sole remaining title, Maxim, were handed off to Cerberus after Quadrangle couldn't make scheduled payments servicing a $100 million loan from Cerberus.



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