As expected, Maxim magazine’s parent Alpha Media Group is being handed over by owner Quadrangle Group to a group of its investors, including PE firm Cerberus Capital Management, the NY Post reported. Alpha, which was acquired by Quadrangle for $250 million two years ago, has had almost nothing but trouble since then. Last year, Quadrangle, the investment fund co-founded by Steve Rattner, defaulted on the debt it used to buy Alpha, setting the stage for the large interest to be transferred to Cerberus, Alpha’s largest creditor. But given Maxim’s significant declines in ad revenue, Cerberus is expected to try to get whatever it can for the magazine and Alpha with a quick sale, industry observers speculated. However, sources told paidContent that none of its creditors has a controlling interest in Alpha.
Calls to Quadrangle and Cerberus were not returned. Alpha had no immediate comment, though it did issue a vaguely worded release saying it had completed a debt-to-equity conversion. No word on how much debt was being converted and no mention was made about Quadrangle and Cerberus. However, an Alpha rep did confirm that Quadrangle no longer has a stake in the company.
Alpha was the U.S. arm of UK-based Dennis Publishing. Maxim originally came with music mag Blender, which has since been shuttered as a print vehicle and has gone online-only. Quadrangle was then under Rattner, who left the firm to become the Obama Administration’s “car czar” six months ago. Rattner stepped down from that job this past week, amid an investigation into alleged “pay-to-play” practices by New York State Attorney General Andrew Cuomo.