Sanoma acquires Tammi Learning and Bonnier Utbildning AB from Bonnier / Bonnier acquires Werner Söderström from Sanoma

October 6, 2011 — Fusion DigiNet

Sanoma has acquired the assets of the Finnish educational publisher Tammi Learning and all the shares of the Swedish educational publisher Bonnier Utbildning AB from the Swedish media group Bonnier AB.

At the same time, Sanoma has sold the shares of its Finnish general literature publisher Werner Söderström Ltd. (WSOY) to Bonnier. The transaction of WSOY is subject to the approval of the Finnish competition authorities. The closing of the transaction is expected during the autumn.

Currently Sanoma has learning operations in Finland, the Netherlands, Belgium, Hungary, Poland and Russia. The total net sales of Sanoma’s learning business were EUR 249 million in 2010. This transaction is in line with Sanoma’s strategy to focus its operations and to concentrate on consumer media and learning solutions.

“Learning solutions are one of Sanoma’s key focus areas. These transactions are logical steps for us as they support our ambition to grow this business and focus our operations” says Harri-Pekka Kaukonen, President and CEO of Sanoma.

“We are delighted with this transaction which brings us to the Swedish learning market and strengthens our Finnish learning business. Both Bonnier Utbildning and Tammi Learning are excellently performing learning companies, which extend well our portfolio” says Jacques Eijkens, CEO of Sanoma Learning & Literature.

On the acquisition of WSOY Maria Curman, CEO of Bonnier Books, said.”Our ambition is to provide WSOY, its authors and employees, the means needed to reach their full potential. WSOY together with Tammi forms a perfect match within the Bonnier publishing family. I see this as an important step in successfully developing our offering of general literature to the Finnish market.”

In 2010, net sales of Tammi Learning, Bonnier Utbildning and WSOY General literature were EUR 10.2 million, EUR 17.6 million and EUR 32.5 million, respectively. Tammi Learning and Bonnier Utbildning employed some 80 people (FTE) and WSOY General Literature some 100 people. The transaction is estimated to improve Sanoma’s profitability from 2012 onwards.

Following the transaction with Bonnier, the net sales of Sanoma Learning & Literature in 2011 are estimated to be at the previous year’s level and operating profit excluding non-recurring items is expected to decrease somewhat. Previously, the net sales of Sanoma Learning & Literature were estimated to increase slightly and operating profit excluding non-recurring items was expected to be at the previous year’s level. Learning business has a strong seasonality within the year, the first and fourth quarter being typically loss-making. For general literature, on the other hand, the fourth quarter is typically the strongest one. Due to this seasonality, this transaction will lower Sanoma Learning & Literature’s fourth quarter result in 2011.

Finland, Helsinki & Sweden, Stockholm

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Kiwibox.com acquires German social network Kwick!

October 5, 2011 — Fusion DigiNet

Kiwibox.com, a New York City based social network, has acquired the social network, Kwick! Community GmbH & Co. KG, a private German Limited Partnership and its General Partner Kwick! Community Beteiligungs GmbH for €7.1M, or approximately $10,000,000.

Kwick! is a European Social Network Community focused on the German-speaking market. With more than 10 million members and more than 2.5 Million Unique Users a month, this platform extends the Kiwibox marketplace toEurope. In addition, combined with the recently acquired Photobook-Community, “Pixunity.de,” this acquisition adds 2 Billion Page impressions a month to the Kiwibox.com network.

Founded in 1999, Kwick! had revenues in 2010 of approximately $5 million, and has been cash flow positive since inception.  Kwick! has 32 employees and uses a network of over 150 volunteers to moderate its website. Following this acquisition, Kiwibox.com expects to be cash flow positive for the fiscal year ending December 31, 2011. As part of the acquisition, the former management team at Kwick! has signed agreements to remain with the company.

“Kiwibox.com”, states Andre Scholz, its President, “will continue to follow its strategic plan to identify other viable social networks as potential acquisition candidates. We also intend to continue to expand our own community, while leveraging operational costs through technology integration within our expanding social  network.”

USA, New York, NY & Germany, Weinstadt (near Stuttgart)

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TrueCar acquires ALG

October 5, 2011 — Fusion DigiNet

TrueCar, a publisher of real-time new and used vehicle pricing data in the U.S. market, has completed its acquisition of ALG. formerly a subsidiary of DealerTrack Holdings. and an industry source for automotive residual values.

“TrueCar has shown a tremendous commitment to maintaining the continuity of ALG operations,” said Raj Sundaram, Senior Vice President of the Services and Solutions Group at DealerTrack Holdings.  “The TrueCar executive team has exhibited a profound understanding and respect for the strong relationship ALG has with the entire automotive industry – and I believe they will actively seek ways maintain and enhance that relationship now and in the years to come.”

TrueCar has also announced that Larry Dominique will be joining TrueCar as Executive Vice President of the Data Solutions Group. Dominique comes to TrueCar from Nissan North America where he served as Vice President, of Advanced and Product Planning and Strategy.

USA, Santa Monica, CA

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Report: Quarterly analysis of UK-headquartered private equity control deals in the £10 million to £100 million segment

October 5, 2011 — Fusion DigiNet

  The volume and value of deals completed during the first nine months of 2011 in the lower mid- market investment space has increased year on year for the past three years, according to research from Lyceum Capital and Cass Business School.

For more information, visit the Lyceum Dashboard

Data from The UK Growth Buyout Dashboard – a quarterly analysis of UK-headquartered private equity control deals in the £10 million to £100 million segment – shows that 63 transactions completed between 1 January 2011 and 30 September 2011. This compares to 50 investments for the same period of 2010 and just 25 during the first nine months of 2009.

During Q3 2011, deal volume has built on an encouraging first six months of 2011 with a greater number of deals completed than in Q2. The combined value of those deals fell slightly (from £794 million to £785 million) but both volume and value of deals was still higher than the same quarter of 2010.

Q3 deal value being lower than Q2 despite five more transactions, indicates that there are fewer large deal opportunities however the lower mid-market continues to replenish itself as new businesses enter the space looking to grow with private equity investment.

Transaction sizes

The combined deal value of £785 million exceeds the £698 million recorded during Q3 2010 and the £220 million of Q3 2009.

The highest transaction value recorded in the last three months was £87.8 million, compared to a high of £100 million in Q2 H1 2010.

Meanwhile, transactions valued between £50 million and £100 million fell from seven in Q2 to five in Q3. The majority of the 22 lower mid-market deals completed were in the £26 million – £50 million range, with 86 per cent under £50 million.

The increase in deal activity indicates that there is a growing appetite for investment and that transactions should continue to rise unless there is a significant reversal in the state of the wider economy. There may not currently be the appetite for the larger end deals in the mid-market space but as long as volume maintains its upward trend, the necessary deal flow which keeps the market moving does exist.

Transaction types

Management buyouts (MBOs) and secondary buyouts (SBOs) remained the most prevalent transaction types for private equity investors, but the number of MBOs completed in Q3 2011 actually fell to nine from 12 in Q3 2010 – lower than each of the previous six quarters back to Q1 2010.

There were also two public to private delistings during Q3, compared to one in each of the previous two quarters.

No Initial Public Offerings (IPOs) were recorded, a trend which stretches back to Q1 of 2010 and is unsurprising in a financial climate of weak capital markets where so many anticipated floats have been shelved.

Trade, IPO and secondary exits

A total of nine secondary buy-outs (SBOs) characterised the quarter – the highest number of any quarter during the last two years and an indication that private equity firms are now beginning to sell assets that they have held onto throughout the depths of the economic downturn.

There were six exits to trade, higher than the previous two quarters but lower than the eight which took place in Q3 2010.

Investments by industry

Technology, media, telecommunications (TMT) businesses continue to dominate the lower mid- market with eight out of 22 deals this quarter (38 per cent) and five transactions in business support services.

Retail – undoubtedly one of the sectors hardest hit by a dip in consumer spending – continues an encouraging run of three deals or more completing in every quarter since Q2 2010.

Commentary

Andrew Aylwin, Partner at Lyceum Capital, said: “In the £10m to £100m value range, UK private equity deal volumes continue to recover. With 63 completed transactions so far for the 9 months to 30th September, the market is trending back to historical norms of 100+ control deals a year. The UK lower mid-market segment remains a plentiful source of high quality opportunities across a range of sectors and private equity firms such as Lyceum Capital continue to play a key role in supporting dynamic companies that need capital to continue their successful development and drive the recovery of UK plc.”

Professor Scott Moeller at Cass Business School commented further: “This performance of the UK lower- mid market in the third quarter is in distinct contrast to the overall market when much larger deals of £100 million plus are considered. That market has declined during the past two quarters and some reports show it declining dramatically in Q3 – Bloomberg, for example, this week reported a 43 per cent decline in deals with European purchasers for the overall market. Therefore, the volume of deals in the lower mid market is encouraging in this difficult economic environment, and may prove in the next quarter to continue to be resilient. There is further evidence in our figures of a positive shift in the market with a strong mix of industries, including healthcare, which was absent last quarter and a resurgence in technology deals.”

Other Research Reports:

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Postmedia Network acquires Sprouter

October 4, 2011 — Fusion DigiNet

Canadian newspaper publisher Postmedia Network has acquired Sprouter, an Internet content company that specialises in the areas of technology, digital media, entrepreneurship and startups. Through the acquisition, Sprouter becomes a division of Postmedia Network. Sprouter will continue to operate under the Sprouter name and branding under the leadership of Sarah Prevette.

“We are thrilled to welcome Sprouter to the Postmedia Network family,” said Paul Godfrey, President and CEO. “Sprouter complements our Digital First strategy and brings a spark of digital entrepreneurship to our family of brands.”

Founded in 2009 by Sarah Prevette, Sprouter enables entrepreneurs to ask a question, browse relevant content, comment on answers, and share advice with their networks. Sprouter also produces the Sprouter Weekly entrepreneurship publication, and hosts Sprout Up events.

Canada, Toronto

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DMGT sells GLM to Providence Equity Partners

October 4, 2011 — Fusion DigiNet

DMGT has sold George Little Management (GLM) to Providence Equity Partners. Providence is acquiring GLM through a new holding company led by Charles G. McCurdy, who most recently served as Chief Executive Officer of Canon Communications, a leading producer of trade shows, publications, and digital and data services.

The total consideration was US$173 million(£111 million) of which $154 million (£99 million) was cash with the balance being an interest-bearing note. In addition, DMGT benefit from selling the business with negative $7 million (£4 million) in working capital.

GLM was founded by George F. Little, in 1924, and acquired by dmgt in 2007, and is part of the dmg:events portfolio. The company is forecast to turnover $71 million and make $26 million of pre-tax profits. GLM employs some 100 people, with offices in White Plains, NY, Atlanta, GA and Naples, FL.

GLM currently produces 15 tradeshows. Alltogether, these events have around 11,000 exhibitors in 1.8 million net square feet of exhibit space, and attract approximately 345,000 attendees.

USA, Providence, RI & White Plains, NY & UK, London

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Scripps to buy nine television stations from McGraw-Hill for $212 Million

October 4, 2011 — Fusion DigiNet
McGraw-Hill is to sell its nine-station Broadcasting Group to The E. W. Scripps Company for $212 million in cash.  The deal is structured as a purchase of stock but will be treated as a purchase of assets for tax purposes, resulting in tax deductions created through the transaction that will be used by Scripps to reduce the net cash cost of the acquisition. The transaction is expected to be modestly accretive to Scripps’ earnings in the first full year of operations of the acquired stations. Scripps intends to finance the transaction with new debt and has secured committed financing for the purchase price.

The Broadcasting Group includes ABC affiliates in Denver, Colorado (KMGH-TV), San Diego, California (KGTV), Bakersfield, California (KERO-TV), Indianapolis, Indiana (WRTV) and Azteca America affiliates in Denver, Fort Collins, Colorado Springs,San Diego and Bakersfield.  The five other stations involved in the transaction – KZSD in San Diego, KZKC in Bakersfield, KZCO in Denver, KZFC in Ft.Collins, Colo., and KZCS in Colorado Springs, Colo. – are low-power stations affiliated with the Spanish-language network, Azteca America.

The nine McGraw-Hill stations, which reach approximately 3 percent of U.S. households and generated revenue in 2010 of $97 million, have roughly 460 total employees.

“This is a terrific opportunity to enter some of America’s most dynamic media markets and tap into the growing Spanish-language marketplace at a very attractive price,” said Rich Boehne, Scripps president and chief executive officer. “The McGraw-Hill stations fit well with our strategy to create economic value through high-quality news and information content that serves both consumers and advertisers through linear television and the exploding array of digital communication devices.

“These stations came up for sale at a good time for Scripps,” Boehne said. “The deal is structured and financed in ways to protect the company’s financial flexibility and our ability to continue investing in emerging media business models. Through this acquisition, we now have the opportunity to extend our local news strategies into markets with big appetites for community-changing journalism.”

The acquisition of the McGraw-Hill stations will extend the Scripps relationship with ABC. With 10 ABC affiliates among its expanded roster of 19 stations, Scripps will be the country’s largest independent operator of ABC stations. The new stations join a Scripps portfolio that includes six ABC affiliates (in Detroit, Tampa, Fla., Cleveland, Phoenix, Cincinnati, and Baltimore), three NBC affiliates (West Palm Beach, Fla., Kansas City, Mo., and Tulsa, Okla.) and one independent (Lawrence, Kan.). The consolidated station group will reach approximately 13 percent of U.S. households.

Morgan Stanley & Co. LLC  acted as financial advisor to McGraw-Hill in the transaction.

USA, Cincinnati, OH & New York, NY

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CheaterVille acquires ZackTaylor.ca

October 4, 2011 — Fusion DigiNet
CheaterVille, a Las Vegas online social media company that provides information about alleged cheaters, today announced the acquisition of one of the largest Celebrity Gossip and entertainment websites in Canada, ZackTaylor.ca.

In a statement to the press, James McGibney, CheaterVille’s founder and CEO said, “By acquiring the rights to ZackTaylor.ca and their sub-domains, we are continuing to expand our reach into the Canadian market by appealing to the millions of viewers who have visited his site since it first launched back in 2007.

Furthermore, we will be rebranding it shortly as the Internet’s first all-inclusive website to find out about exclusive celebrity cheating scandals.  Since CheaterVille’s recent expansion intoCanada, we are easily on track to surpass 250,000 subscribers since our company’s launch on Valentine’s Day of this year. I want to thank all of our Canadian fans for their unbelievable support in our continued effort to fight infidelity!”

USA, Las Vegas, NV & Canada, Totonto

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Rhapsody is to acquire Napster

October 4, 2011 — Fusion DigiNet

Rhapsody is to acquire Napster from Best Buy Co. The transaction will combine the subscriber bases of the two largest premium on-demand music services in the United States. Under the terms of the agreement, Rhapsody will acquire Napster subscribers and certain other assets, and Best Buy will receive a minority stake in Rhapsody.  The transaction is expected to close on or around November 30, 2011.

“Rhapsody has demonstrated that it has what it takes to build a profitable business in the increasingly competitive on-demand music market,” said Chris Homeister, senior vice president and general manager of entertainment for Best Buy. “We are confident they are the right partner to provide Napster’s existing subscriber base with an immersive digital music experience moving forward.”

“This is a ‘go big or go home’ business, so our focus is on sustainably growing the company,” said Irwin. “We’re excited to welcome Napster music fans to the best on-demand music experience anywhere.  Our new members will have more places to connect to the music they love and to discover new favorites, guided by Rhapsody’s rockstar editorial team and the tastes of other Rhapsody members via our innovative social features.

USA, Seattle, WA

 

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Scripps Networks Interactive and Virgin Media complete UKTV Transaction

October 3, 2011 — Fusion DigiNet

Scripps Networks Interactive has completed the acquisition of Virgin Media’s stake in UKTV, one of the United Kingdom’s leading multi-channel television programming companies, following regulatory approval in the Republic of Ireland and Jersey.

In completing the acquisition, Scripps Networks Interactive has acquired a 50-percent common equity interest in the UKTV partnership and the outstanding preferred stock and debt owed by the partnership to Virgin Media. BBC Worldwide, the commercial arm and wholly owned subsidiary of the British Broadcasting Corp. (BBC), is the other 50-percent stakeholder in UKTV.

Formed in 1997, UKTV attracts about 39 million viewers a month across its portfolio of 10 lifestyle, entertainment and non-fiction (factual) programming channels. UKTV brands include Home, Good Food, Dave, Watch, GOLD, Alibi, Eden, Blighty, Yesterday and Really. UKTV also operates complementary websites for each channel brand.

UKTV channels air award-winning shows from the BBC in addition to original programming. All of the UKTV channels are available on Sky Digital and Virgin Media. Dave, Yesterday and Really also are available on Freeview.

USA, Knoxville, TN & UK, London

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