How much will Mira! be Sold For?

New York-based tabloid publisher American Media announced that it plans to sell five of its 16 titles, including the celebrity gossip magazine ¡Mira! (biweekly, Spanish, newsstand price $2.00).

With the sale of ¡Mira!, American Media will have extricated itself from the Hispanic publishing market altogether, having discontinued Shape en Español earlier this year.

Although an announcement has not been made regarding a potential buyer for ¡Mira!, some analysts interviewed by Portada® have speculated that Editorial Televisa could have an interest in picking up the publication.

David Jackson, VP group publisher of American Media, tells Portada® that his company will focus on general market entertainment and active lifestyle publications.

Jackson adds that “¡Mira!, is going very well. It's a great magazine for somebody to purchase.” It's the best selling Hispanic magazine in Walmart.”

Most of ¡Mira!'s sales are newsstand based. Approximately 70% of its total circulation (guaranteed rate base is 120,000) is derived from newsstand.

Valuation

Portada® estimates ¡Mira!'s valuation to lie between US $15 million and US$ 17 million.

As opposed to most Hispanic magazines circulation sales are a large component, approximately 50%, of ¡Mira!'s revenue mix. According to Media Economics Group, ¡Mira! had advertising revenues last year of US$ 5.777 million. Assuming a 30% rate card discount, Portada® estimates that 2005 “real”advertising revenues were US$ 4 million and total sales (including circulation sales) amounted to US$ 8 million. Assuming a 18% EBITDA margin (Earnings before Interested Taxes Depreciation and Ammortization), 2005 EBITDA was US $1.44 million. ¡Mira! ‘s advertising revenue is growing rapidly. According to American Media, for the first half of calendar year '06, ¡Mira!'s advertising revenue is up 26% versus the same period of 2005.

According to media investment bank AdMedia Partners, currently applicable EBITDA (Earnings before Interested Taxes Depreciation and Ammortization) multiples for U.S. consumer magazines transactions lie between 8-10 times EBITDA. Due to the strong growth of ¡Mira!'s revenues, a reasonable EBITDA multiple for the Hispanic celebrity gossip mag should be at a premium compared to the average U.S. consumer magazines; betweem 11-12 times EBITDA. Applying these multiples we can infer a value of between US$ 15.84 and 17.28 million.


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