Scoop: Koch eyes Forbes deal
Add Axios as your preferred source to
see more of our stories on Google.
Koch Industries Inc. headquarters in Wichita, Kansas in 2005. Photo: Larry W. Smith/Bloomberg via Getty Images
Koch Inc.'s private equity arm is in ongoing talks on a bid to buy Forbes in partnership with another individual investor, sources told Axios.
Why it matters: Koch Equity Development (KED) has a history of successful media investments, including its 2017 deal to back Meredith's acquisition of Time Inc. with $650 million and its 2018 and 2019 investments in Getty Images worth $550 million.
The big picture: Forbes' current owner has been seeking a sale for years, but concerns about foreign ownership stymied two previous efforts.
Between the lines: KED allocates roughly 10% of Koch Inc.'s profits towards acquisitions and long-term growth investments. The firm often targets companies that are poorly managed or undervalued.
- It will often partner with a strategic buyer on deals that aren't part of Koch Inc.'s core competencies in manufacturing and technology.
- The Koch family is widely known for its support for conservative and libertarian causes, but KED does not become editorially involved in its media deals.
- KED operates independently of Koch's 501(c)3 philanthropic organization Stand Together, which invested in Semafor last year.
State of play: KED is in talks with a media entrepreneur named Divyank Turakhia to partner on a bid for Forbes that would value the company at roughly 10% less than the $630 million valuation it received for its blank check merger in 2021, sources told Axios.
- The deal would include an equity rollover from Forbes' current owners, a source said.
- Turakhia had at one point worked with Forbes' affiliate platform, Forbes Marketplace, as a client. Turakhia sold his ad tech company Media.net for $900 million in 2016.
- Turakhia is an Indian-born serial entrepreneur. Sources said he and KED aim to structure the deal so as not to run afoul of regulators over foreign ownership concerns.
- A spokesperson for KED declined to comment. Turakhia and Integrated Whale Media did not comment. A Forbes spokesperson said, "As a matter of policy, Forbes does not comment on rumors or speculation."
Catch up quick: The Forbes family sold a majority stake (95%) in Forbes to a Hong Kong-based investment firm called Integrated Whale Media (IWM) in 2014. The family retains a 5% stake in the company and board seats.
- IWM been trying to liquidate its investment for years. But its past two attempts — a 2021 blank check merger and a 2023 private sale — were scuttled, in large part due to foreign ownership concerns.
Zoom out: KED in the past has eyed buying Forbes itself — without a deal partner, a source told Axios.
- In the months that have passed since the collapse of a deal to sell Forbes last year, IWM has been in talks with a few potential buyers.
Reality check: The target valuation for the company, which includes Forbes Marketplace, is high given the current marketplace for media deals.
- Forbes Marketplace was originally created by a group of ad tech and product experts in 2019.
- It's the most profitable part of the company, but Forbes only owns 40% of it. The rest of the business was divided between executives who helped build it (50%), as well as members of Forbes' management team (10%).
- Forbes' business was doing well when the company first eyed a blank check merger in 2021. Like most of the media sector, it's had to cut costs in the past few months amid a slower ad market.
What to watch: Any deal to sell Forbes that includes Forbes Marketplace as part of its valuation would need to provide liquidity to the investors in Forbes Marketplace, in addition to IWM.
- Because Forbes supports Marketplace with backend infrastructure, valuing the combined company is difficult and could be a complicated point in deal negotiations.
