RECENT MEDIA MERGERS VALUED AT $2.55 BIL: DESILVA REPORTS COMPETITION RISES FOR COMPANIES VALUED AT $10 MIL+

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There were 97 merger and acquisition deals in the magazine and new-media fields, valued at $2.55 billion, in the 12-month period ended April 30, according to media investment banker DeSilva & Phillips.

Reed Elsevier's acquisition of Chilton Publishing Co. for $447 million was the largest deal during the period, followed by Wolters Kluwer's purchase of Waverly for $375 million and Primedia's buy of Cowles Media for $200 million.

Several factors are driving the market, according to DeSilva's latest report. Investment buyers are targeting companies to build publishing platforms that allow for significant economies of scale.

LESS INTEREST IN SMALLER COS.

The field of buyers for less than $10 million properties has narrowed, it said, while competition for companies valued at more than $10 million has become much more aggressive.

Buyers also want to see only profitable titles, showing little patience for turnaround properties. Another driving factor is that larger companies are still pruning their portfolios, such as Primedia's sale of New Woman to Rodale Press. Rodale now is looking to sell American Woodworker.

Magazine companies continue to diversify by buying conferences and expos to reduce dependence on ad revenues, as well as continuing to look for opportunities for international expansion.

Roll-up practitioners, which buy up related properties to form larger companies, are fueling deals by moving decisively to establish an important position in a market sector, such as Wasserstein Perella acquiring American Lawyer and then following up with two more legal publishing acquisitions, set for later in the year. Smaller buyers are now looking to emulate those buyers.

NEW-MEDIA FACTORS

New-media deals are being fueled by three main factors: Buyers have pricey stock to use for transactions; big names in traditional media, such as Hearst Corp., Time Warner, Times Mirror Co. and Primedia, appear ready to buy; and successful small Web publishers are feeling insecure and are more willing to consider a home with a mainstream publisher.

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