ZelnickMedia buys direct-marketing co.
Company to pay around $60 mil
Private equity fund Ripplewood Holdings, with ZelnickMedia, will pay approximately $60 million (a 73% premium over the company's Tuesday closing stock price) for the 52-year-old specialty catalog and online retailer.
Zelnick said he intends to expand and improve the operation significantly, in part by signing a distribution deal with a major home-shopping provider such as Diller-backed HSN or QVC.
"We see direct marketing as a media business," said Zelnick, alluding to the similarities with how Diller exploited opportunities in unsexy areas and built up home shopping and other transactional businesses into USA Interactive.
Zelnick will become chairman of the direct-marketing group and handle day-to-day management of the Rye, N.Y.-based venture.
Lillian Vernon herself will retain 5% ownership in the company after the deal, though she will step down from an operating role.
This is the first controlling stake for the ZelnickMedia partnership, which owns mostly small interests in music and magazine publishing and online games.
ZelnickMedia is believed to be interested in expanding its holdings into TV and branded entertainment properties.
