Financial terms of the deal, which is expected to close in the current quarter, were not disclosed.
Laurie Battaglia, currently exec VP- managing director of Roll Call Group, will lead the new enterprise. “The new CQ-Roll Call Group will have the largest and most experienced newsroom covering Washington and will be the leader in providing insight and analysis about the workings of Congress,” she said in a statement.
Roll Call said it had no plans to shut down any CQ products, which include CQ Today, CQ Weekly, CQ.com and a host of newsletters and other paid subscription products. Roll Call, however, did leave the door open to job cuts, because there is a modest amount of overlap in the coverage areas of the two companies. A press release issued Tuesday by Roll Call said, “The great majority of the CQ staff will join the merged organization.”
One employee in particular won't be joining the new entity. Bob Merry, currently president of Congressional Quarterly, will not be employed by the merged company. “As in many such instances of two companies coming together, one CEO inevitably becomes extraneous. In this situation, that's me,” Merry said in a statement.
Roll Call Group reportedly won the auction for CQ over Bloomberg, Washington Post Co., Atlantic Media (owner of CQ's chief competitor, The National Journal) and Allbritton Communications (owner of Politico). Mike Marchesano, managing director of Jordan, Edmiston Group, an investment bank representing Times Publishing in the deal, declined to identify other bidders, but said, “It was a very full auction.”
Even though b-to-b media mergers and acquisitions activity has come almost to a standstill, industry observers were not surprised that bidders were interested in Congressional Quarterly, which derives a large share of its income from digital subscription products.
“It's a pretty solid company coming up for sale at not the most propitious time,” said Jeff Dearth, partner at media investment bank DeSilva & Phillips. “But for the companies that wanted the franchise, the timing didn't make any difference. It was a desirable property and not something that changed hands very often.”
The deal was also helped, observers said, because of the financial power Washington is currently wielding because of the recession and its bailout of the financial and automotive industries.
Times Publishing Co., which is owned by the nonprofit Poynter Institute and publishes the St. Petersburg Times, decided to sell CQ—even though the M&A market was moribund—because it needed to focus on investing in the newspaper. “Like many newspaper companies, they're circling the wagons,” said one media industry observer who spoke on condition of anonymity.
Insiders at CQ are hopeful that Roll Call, with its backing by Economist Group, will be able to invest in growth in a way that Times Publishing was not able to do with its newspaper business under fire.