The publisher of the eponymous Zagat guides, which is on sale now, may have too high a hope on the price, according to TheDeal. Several private equity firms have dropped out of the bidding due to the high price, reports TheDeal (sub. req.). When the news of its potential sale came out in NYT in Jan, the price being bandied around was in the $200 million range, which is about 20 times Ebitda (the story says it produces roughly $5 million in cash flow and about $8 million to $10 million Ebitda).
Goldman Sachs is the banker, and the books were sent out in February…the story says the banker is being selective about who it wants to see the books. But, “The business is a lot smaller than you think it is…Given how well-known the brand it is, it did surprise me how small they were,” said one PE source who dropped out.
Now the thinking is that selling to the strategics might be the best option. IAC (NSDQ: IACI) might have been interested, but Diller has bigger things to worry about right now. New York Media Holdings, publisher of New York magazine (owned by Bruce Wasserstein