Reed Elsevier is purchasing the three principal divisions of Chilton from the Capital Cit-ies/ABC unit of Walt Disney Co. for $447 million, a price slightly higher than most analysts were predicting the group would fetch (AA, June 23).
Included in the sale are 39 trade magazines, accounting for 83% of Chilton revenue; Professional Exposition Management Co., which will be folded into Reed Exhibitions; and Chilton Research Services.
UNIT TO HAVE 131 TITLES
Reed Elsevier Business Information will have 131 titles. But how many remain in the fold won't be known until the new management structure is set sometime in the fall. The deal is expected to close by Aug. 1.
Industry observers are speculating that some titles will be merged in the aftermath of the sale. Cah-ners operates 15 titles catering to the manufacturing segment, while Chilton has 14. Other areas served by titles owned by both companies include building and construction, communications, electronics, entertainment, food and retail.
"That is not our approach to this, to merge titles," said Cahners President-CEO Bruce Barnet last week. "Our strategy going into this acquisition was that we wanted to be the information provider for the business-to-business communities we serve. Chilton gave us the ability to add more content and reach."
He didn't completely rule out the possibility, however.
"We don't have any titles at the moment that we are looking to combine, but I'm not saying it won't happen. The main thing is that we have added content," he said.
AN INFORMATION PROVIDER
What will be done with that content also hasn't been decided. As its new company name suggests, Reed Elsevier Business Information is positioning itself as an information provider rather than a publishing company.
"This acquisition makes us the key information provider in a number of areas," said Mr. Barnet, adding that the information can be delivered in the form of Web sites, publications, trade shows or research.
"The vertical brand of the individual titles is what is most important to us, whatever it evolves into," he added.
Industry executives do see changes coming.
"They are going to have to look at it and make some tough decisions on how to merge the businesses," said Bill Hebel, group media director at J. Walter Thompson USA, Chicago. "I think they are either going to spin off or sell some things. Knowing Cahners, I suspect they will try to sell."
The acquisition "fits very nicely and gives them the dominant position in the trade arena," said Paul McPherson, managing director of AdMedia Partners, New York.
The sale also brings Reed Elsevier a new leading area of content: automotive, which some observers earlier predicted would be spun out and resold by whoever captured Chilton.
"We have no plans to sell the auto group, absolutely no plans to do it," said Mr. Barnet.