Oakley Capital has bought a 50 per cent stake in Time Out, in a deal that values the iconic magazine at more than £20m.
Founder Tony Elliot has been searching for an investor but was determined to resist being snapped up by a larger media company.
He is understood to have made at least £3m from the share sale – the sum he invested in it earlier this year after banker Lloyds became uncomfortable with the level of lending to the firm.
He says he will hang onto the other half of the firm he founded in 1968 with just £70.
The group has grown to incorporate 36 city magazines published in 24 countries, 22 travel magazines in 19 countries and an extensive events business.
Annual turnover is £17m – down from its peak of £25m in 2007. However, the firm reported a profit of £1.7m after cutting costs.
He said: “We are more profitable this year than we have ever been, and going forward the sky is now the limit on what we can achieve.”
Elliot added: “There is incoming money into the business that has dealt with debt. It’s dealt with working capital, it’s dealt with various costs and I have some money. We now have absolutely no debt.”
Oakley director Peter Dubens said the investment firm plans to develop Time Out’s digital potential.
“We are going to help the business, which has not had a lot of working capital over the last few years, to create a very large presence digitally, both mobile and on the internet.
“There are many cities the magazine is not in, and the other thing that will happen will be expansion, both more depth in cities it is already in, and in further cities all over the world.”
Liberum Capital acted as financial adviser and broker on the deal.
TONY Elliott famously founded Time Out in London in 1968 for just £70, building the firm into a global presence.
The 63-year-old took his magazine to America in 1995 to scepticism on both sides of the Atlantic but it has since become a staple in cities including New York and Chicago.
He had a well publicised spat with the BBC after its acquisition of Lonely Planet, a major rival to his Time Out city guides. In 2005 he survived prostate cancer.
He has also endured peaks and troughs with the business.
Earlier this year he was forced to inject £3m of his own money into the business, which included remortgaging his St John’s Wood home.
SERIAL entrepreneur Peter Dubens learnt his trade from Joe Lewis, the Bahamas-based billionaire currency trader, who he spent his summers shadowing as a student. He has sold everything from novelty T-shirts to smoothies.
He made his name in the wake of the dot com bubble in 2000 by buying up troubled companies for pennies, fixing them (or breaking them up) and selling them for a healthy return.
He launched Oakley Capital in 2007, before the crash, but was spurred on by the credit crunch, sending his team looking for distressed firms in need of a cash injection. He specialises in financial services and technology firms. His most famous venture is Pipex, the broadband group, which he sold in 2007 for £210m.