Cinven has arranged debt facilities of pounds 580m for the deal, and will put up over half of the remaining pounds 280m as equity. IPC's management team, led by chief executive Mike Matthew, will buy a "meaningful" equity stake with a consortium of banks controlling the rest.
Cinven director Brian Linden rejected allegations that the venture capital group had offered too much for the business. He said IPC, which leads the pounds 1.5bn UK magazine market, publishing titles such as Country Life, Woman's Own and Loaded, had good growth potential. Cinven plans to invest in the business before floating it on the stock market in about five years' time.
Reed Elsevier said it was delighted with the sale. "We're very happy to have done it swiftly, cleanly and at such a good price," said finance director Mark Armour. The sale marks the end of Reed's involvement in consumer publishing. It is currently attempting to sell off what remains of its consumer books division.
Mr Armour said the proceeds, which will leave the group with net cash, would be used to develop its scientific, professional and business divisions, which are concentrating on "must have" information.
Although Reed is currently seeking regulatory approval for its merger with Dutch publishing group Wolters Kluwer, Mr Armour did not rule out making acquisitions before the merger was approved.
The European Commission is due to rule on the deal in April, while shareholders will be asked to vote on it at the end of the same month.
Reed insisted that it had not received any better offers for IPC. The group had angered other bidders by allowing Cinven to enter into exclusive negotiations with IPC's management just before Christmas. But an adviser to Reed said that Cinven's bid had provided the best value, and that none of the other contenders had subsequently attempted to table a higher offer.