Ed’s Note: Welcome to Inside The Deals, a weekly column about M&A in the media written by veteran business journalist Steve Rosenbush. Steve is based in New York, and previously was the finance writer for BusinessWeek.com, responsible for coverage of M&A. His interests include the evolving business of media. He can be reached at steve AT paidcontent.org.

Reed Elsevier (NYSE: RUK) knows it won’t be easy to sell its magazine division, known as Reed Business Information. The economy and the credit markets have seized up like an old car on a cold winter morning. The Internet is bleeding the high-margin print advertising business that drove the growth of RBI titles like Variety and Publishers Weekly. To make the sale even tougher, Reed Elsevier, with headquarters in London and Amsterdam, has decided to hold onto RBI’s lucrative trade show business. No wonder Reed Elsevier CEO Sir Crispin Davis warned Feb. 21 that the sale of RBI could take months.

Swiss investment banking giant UBS is running the auction out of its London office. UBS bankers are expected to release the offering documents to potential buyers in about a month, our sources say. Excluding the exhibition unit, RBI had revenue of about $1.8 billion last year. Some bankers in the U.S. say the sale could be worth $2.2 billion, or even more.

That price wouldn’t have been too hard to achieve—last year. Back then, the business might easily have commanded 9-11 times earnings before income taxes, depreciation and amortization. In the current, it may be a challenge to get more than 7 or 8 times EBITDA.

It’s not that RBI is a bad business. It has more than 130 well-regarded trade titles, and online revenues are growing briskly. But when print is thrown into the mix, overall revenue growth is an anemic 1 percent. The Chapter 11 bankruptcy filing of magazine publisher Ziff Davis Media last week won’t help sentiment, either. It’s true that ZD was particularly vulnerable, thanks to a high debt load and exposure to the volatile tech market. But just as the subprime credit crisis has scared investors away from the higher end of the credit markets, trouble at the riskier end of the publishing market could infect the upper tiers. “What’s really interesting about Reed is that it could send an important signal about whether the current U.S. economic situation is about to wreak havoc on the sale of large cap companies,” said Jay MacDonald, a partner in the digital media and technology group at New York investment bank DeSilva & Phillips. (Disclaimer: A sponsor of ours.)

How can the infection spread? For one thing, the credit crunch is going to thin the pool of prospective buyers. A multibillion-dollar deal is going to be very expensive for strategic buyers. Only the largest private equity firms, such as Apax, Cinven and Providence Equity Partners are likely to pull off such a transaction in today’s market. Apax and Guardian Media already have their hands full with last year’s acquisition of Emap’s B2B magazines. One banker says it might actually take a consortium of big private equity firms to buy RBI. Such “club” deals tend to reduce transaction prices, because buyout firms cooperate with one another instead of competing.

Just 15 months ago, the sale of RBI would have been overshadowed by much larger media deals. But in today’s market, it’s an important test. It won’t be easy to ace.