Whittle's Expansion Plans Bolstered by Firm's $350-Million Investment
Whittle Communications, known for its "Channel One" classroom broadcasts and its ambitious plan to open a chain of for-profit schools, plans an expansion following a $350-million investment by a New York City firm last week.
The investment firm Forstmann Little & Company acquired one-third ownership of the Knoxville, Tenn.-based media company in exchange for the financing, reducing the 50 percent stake held by Time Warner Inc.
Christopher Whittle, the founder of Whittle Communications, and officials of the other companies involved in the deal described last week's announcement as a signal that Whittle is prepared to move ahead with new projects and expand existing operations.
"An alliance with Forstmann Little will help us realize our plan to be one of the nation's most important media firms," Mr. Whittle said in a statement issued jointly with the investment company. He added that Forstmann Little's investment and involvement "will be important resources for us as we develop increasingly large-scale, alternative media systems."
Mr. Whittle said Whittle Communications plans a series of announcements in the coming months on how it will deploy the new resources. In addition to Channel One, a commercially sponsored daily news program viewed in more than 9,000 schools, the company provides Special Reports Television and Magazine, seen in 20,000 medical offices.
Theodore J. Forstmann, general partner in Forstmann Little, noted that Whittle has "posted a 30 percent revenue gain in a major media recession."
The company last year marked its 20th straight year of revenue growth. It ended the 1991 fiscal year with $207 million in sales, Whittle officials said.
In less than three years, Time Warner--while reducing its stake in Whittle in last week's transaction-has seen its overall investment of $185 million grow to a share equal to the $350-million chunk bought by Forstmann Little.
Charles Sinclair, president of Associated Newspapers Holdings P.L.c., a British company that has been a partner with Whittle since 1979, noted that the infusion of cash "will accelerate the company's already remarkable expansion."
Under the new structure, Time and Forstmann Little will each hold a 33 percent share, Associated Newspapers will hold 22 percent, and Mr. Whittle will own slightly more than 7 percent of the company, down from the 11 percent he previously held. Other top Whittle executives will hold the rest. --LH.
Vol. 11, Issue 02, Page 10Published in Print: September 11, 1991, as Whittle's Expansion Plans Bolstered by Firm's $350-Million Investment