InvestmentNews owner accepts $8 million deal for non-IN assets overseas and will (likely) name buyer for the New York City trade pub after Christmas

The Bonhill Group is set to seal an $8 million sale of its overseas assets, but the buyer isn't acquiring its prize possession, InvestmentNews in New York City, which may have its own deal underway.

The London, UK, media and events company confirmed its sale -- minus InvestmentNews -- to an unnamed UK media company. The all-cash deal is worth £6.6 million. 

“[Bonhill] has received a conditional offer of £6.6m in cash … for the assets and trade of its UK and Asia businesses, which, subject to the completion of satisfactory due diligence." is "expected to complete in January 2023,” the company reports in a Dec. 9 update to the London Stock Exchange (LSE).

“[Bonhill] has [also] received indicative conditional offers for its US business, InvestmentNews,” the statement continues.

The media group confirmed in an email to RIABiz that it will announce its preferred buyer for InvestmentNews soon, after sifting through a wad of global bids.

"[The] UK deal is a bit further on than the US, but both should complete early in the New Year," says CEO Patrick Ponsford, via email.

"I don’t think we'll be able to name anyone 'til after Christmas, but both buyers are very committed," he adds.

Share bounce

Bonhill will apparently book a loss on the separate sale of InvestmentNews, which a source values at roughly $11 million. See: InvestmentNews is again for sale as 'huge gamble' bleeds more cash in 2022.

Bonhill bought the New York City events, research and publishing concern from Crain Communications in July 2018 for $27.1 million. But the wider company's high cash burn -- and a 2020-21 COVID-driven slump in the events business -- prompted the current firesale.

Bonhill's share price jumped on news of the agreed sale of its British and Asian businesses, climbing just under 31%, from 5.75 GBX to 7.53 GBX, or roughly from $0.07 per share to $0.09 per share, Dec. 9. 

The LSE uses GBX, or Penny Sterling, given the number of small-cap listings on the exchange. 

Bonhill's share price had climbed a further 6.2%, by Dec. 13, reaching a high of 8 GBX, or just under 10 cents, although it has since fallen back to 7.53 GBX, as of Dec. 20.

Its sale price, excluding the sum it receives for InvestmentNews as a separate concern, amounts to approximately 5.5 GBX per share, according to LSE filings -- 11% lower than the roughly $9 million valuation previously reported. See: Bonhill bonfire underway.

Within days of its Oct. 10 announcement, the company's share price fell from 5.75 GBX (Oct. 7) to 3.25 GBX (Nov. 2) -- a fall of roughly 43.5%.

It remains 28% off its 52-week high of 10.46 GBX, as of Dec. 20.

Headroom issue

Bonhill first listed the sale, Oct. 10. See: InvestmentNews is again for sale as 'huge gamble' bleeds more cash in 2022 than owners projected and doesn't 'pay off,' exec says.

In a statement to the LSE, it stated that “market turbulence … led to a weakening in traditional media and content projects, as clients … held off on discretionary marketing spend," which led to its decision to put out the for sale sign. 

Indeed, profits and cash flow issues predicated the company's sale, Ponsford told RIABiz in a late October email exchange.

“We have cash and access to cash but not the kind of headroom that gives us the freedom to do what we want. The share price rattles along the ground and there is little liquidity," he explained. 

By Dec. 9, Bonhill confirmed its receipt of a £6.6 million conditional offer for its UK and Asian businesses from a UK buyer.

It also revealed several "indicative conditional offers" for InvestmentNews, from which it will choose a final buyer.

Bonhill forecasts improved advertising in the first quarter of 2023 -- up 31% year-over-year -- the company confirmed in its latest LSE filing. 

InvestmentNews' bookings are up 57%, and its UK business's bookings are up 16%, the firm noted.

Scratch start

Crain founded InvestmentNews in 1998 under the auspices of late-publisher William “Bill” Bisson and associate publisher Suzanne Siracuse, who later succeeded him. 

After a slow start, the publication expanded coverage as the advisory industry grew, and it became a dominant publication in its niche. Crain sold the national weekly to pay down debt after brothers Keith and Rance Crain, who co-owned the company, parted ways. 

Siracuse stayed on for a year until Bonhill named a new publisher. Most of the magazine's existing staff left around the same time, and the brain-drain set back the publication. Then, the COVID pandemic hit. 

By then, Bonhill had invested heavily in events, which depended on attracting live audiences. It could not make up for the loss in sales through virtual events.