Clarity Partners doubles down on ‘luxury’ media

Private equity firm Shamrock Capital has sold its stake in a luxury-focused media group to co-investment partner Clarity Partners at a five-times valuation over the original purchase price.

Clarity Partners, a leading media-focused private equity firm with over $1 billion under management, has acquired from Shamrock Capital a controlling stake in magazine publisher Modern Luxury Media for approximately $250 million – about five times the amount Shamrock committed in November 2004.

The deal, reached through an auction involving about 30 other potential buyers, has Clarity leading a new ownership group that includes additional contributions from Lehman Brothers, Credit Suisse, and NewStar Financial.

Los Angeles-based Modern Luxury, whose management team will remain under the new ownership, has boomed while the magazine industry has wilted, in part because it caters to affluent, metropolitan-area professionals – the luxury advertiser’s perfect audience. When it was acquired by Shamrock in 2004, Modern Luxury published three magazines; today it publishes 25 regional lifestyle magazines in 12 cities including Chicago, Los Angeles, and San Francisco, and its titles have a combined U.S. readership of over 3.5 million people.

“We look forward to working with Clarity on the many growth initiatives we currently have in place, including additional geographic expansion, strategic acquisitions, expansion within existing markets and the deployment of our online strategy,” John Carroll, president of Modern Luxury, said.

Shamrock Capital, the private investment company of the Disney family that bought up Modern Luxury in late 2004, hasn’t fared too badly either. Its $50 million investment, for its first fund, has now become $250 million – roughly $90 million more than Shamrock’s entire first fund. The firm closed its second fund, of $311.5 million, last September.

Clarity Partners’ other media holdings include ImpreMedia, a leading publisher of Spanish-language newspapers in the U.S.; Oxygen Media, the women’s cable television network; and Crescent Entertainment, which holds interests in the film production company Village Roadshow Pictures.