Although advertising for magazines may be soft and newsstand circulation challenging right now, one aspect of the magazine business is booming. More and more publishing companies and individual titles are being bought and sold, especially those devoted to special interests as well as business-to-business magazines. Last week’s sale of Inc. and Fast Company by the German publishing company Gruner + Jahr to Joseph Mansueto, the billionaire CEO of the financial research firm Morningstar, was just the latest – and one of the least expensive – deals.

According to Adam Gross, vice president of marketing and communications for Jordan, Edmiston Group, a middle-market investment bank for the publishing and information industry, “The first half of 2005 saw 26 deals totaling nearly $27 billion in value.” In fact, in the first six months of the year there was a 15.2% increase in activity over the previous year and an explosive $17 billion increase in transaction value.

Why are there so many deals happening now? “The strategic players” – publishing companies that buy magazines to keep in their portfolio for the long term – “have virtually disappeared,” said Roland DeSilva, a partner at boutique investment bank DeSilva and Phillips, an active publishing deal-maker. The only recent strategic deal was Meredith’s purchase of Gruner + Jahr’s women’s magazines for $350 million, which included Parents and Family Circle. That deal was done privately by executives of the two companies.

Polly Perkins of AdMedia Partners, the firm that handled the Fast Company and Inc. sales, notes that it, too, was not a typical deal. “It was done very fast,” she said. “Most deals can take four to six months. But since Gruner + Jahr was leaving the business in the United States, this deal had to be concluded by June 30, and it was.” Even though both magazines face considerable challenges, several big publishing companies – including Time Inc. – were interested in purchasing them.

“Most deals that are being done today are with private equity funds,” Mr. DeSilva said. “These funds believe they can get a better return this way than by making other investments.” Ten years ago there were only a handful of such funds that specifically targeted publishing. Now there are more than 250. “There is lots of money around,” said Mr. DeSilva. Private equity funds look for a return of at least 22% within three to five years.

A recent deal that was much bigger than the Fast Company and Inc. sales, but that garnered much less press, was the purchase of Hanley-Wood, a publishing company that serves the construction and residential construction industry, to JP Morgan Partners for $650 million. DeSilva & Phillips advised JP Morgan.

Veronis Suhler Stevenson, headed by the well-known and well-connected John Veronis and John Suhler, sold the magazines. At one time, the company was the leading investment bank in the publishing field, brokering many high profile deals. More recently, VSS has established its own private equity fund and is concentrating on buying, operating, and selling publishing groups. In April Veronis Suhler Stevenson sold Canon Communications, a leading producer of print publications for the medical-device industry, to Apprise Media, a niche company backed by Spectrum Equity Investors.

Also in April, VSS bought Facts on File, which publishes high-quality encyclopedias, dictionaries, atlases, chronologies, almanacs, and biographies in a variety of platforms, including print and online databases.

Another recent big-ticket deal was the June sale of F+W Publications to Abry Partners for $500 million. F+W publishes special-interest magazines, including Horticulture and Writer’s Digest. In the deal Abry Partners was represented by DeSilva and Phillips, who also recruited David Steward – a founder of Martha Stewart Omnimedia, president of TV Guide and, more recently, CEO of the direct marketing firm IMP – to take over as CEO when the F+W deal is completed in July.

Although the media practices of Morgan Stanley, Goldman Sachs, and Credit Suisse First Boston are often involved in the biggest television and movie-industry deals, AdMedia Partners: Jordan, Edmiston; and DeSilva and Phillips currently handle many magazine transactions. All have partners with many years of experience and many connections in the small, clubby magazine-publishing industry.

Wilma Jordan, founder of the 17-year-old Jordan, Edmiston Group, was at one time the chief operating officer and a major shareholder in Esquire. Her husband, George Green, is the president and CEO of Hearst Magazines International. “Wilma knows everyone and is just brilliant,” said Ms. Perkins of AdMedia Partners. “Lots of people in the industry have connections with her.”

Mark Edmiston, now a partner at Admedia, once was Ms. Jordan’s partner. Mr. Edmiston also worked at Life and Psychology Today and was the president and CEO of Newsweek.

Reed Phillips, now a partner at De-Silva and Phillips, also spent time at Jordan, Edmiston. His magazine experience includes stints at the New Republic and the Washington Monthly. Mr. DeSilva worked at McGraw-Hill and Capital Cities/ABC and was the founder of U.S. Business Press, a nine magazine business-to-business publishing company.

Nowadays many publishing veterans have started or joined private equity funds. For example, Charles Mc-Curdy, the founder and CEO of Primedia, heads Apprise Media, backed by Spectrum Equity Investors, which was the purchaser of Canon Communications. Efrem “Skip” Zimbalist, the former CEO of Times Mirror, leads Active Interest Media, which was formed with Wind Point Partners, a private equity fund. Even Norman Pearlstine, the current editor in chief of Time Inc., who was recently in the news for agreeing to turn documents over to a federal prosecutor investigating the leak of an undercover CIA operative’s identity, has worked in the private equity field. Before joining Time and after leaving the Wall Street Journal, he spent a year and a half as a general partner at Friday Holdings, a multimedia investment fund.