Pearson to acquire Author Solutions for £116M

July 19, 2012 — Fusion DigiNet

Pearson has acquired Author Solutions from Bertram Capital for $116 million in cash.

Formed in 2007, ASI is a leading provider of professional self-publishing services. It has enabled 150,000 authors to publish, market and distribute more than 190,000 books in print and electronic formats and benefits from several powerful growth trends including user-generated content, eBooks and digital publishing and marketing technologies.

Self-publishing is a rapidly growing segment of the consumer books market. According to Bowker, 211,000 titles were self-published in 2011 in either print or digital form, an increase of almost 60% on 2010. The self-publishing sector has also become an important source of talent and content for the publishing industry, producing several bestselling authors including Lisa Genova, John Locke, Darcie Chan, Amanda Hocking, Bronnie Ware and E.L. James.

The acquisition gives Penguin a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate. Penguin will gain access to ASI’s expertise in online marketing, consumer analytics, professional services and user-generated content. ASI will benefit from Penguin’s design, editorial and sales skills, and its strong international presence as it looks to expand outside the US.

Penguin’s chief executive John Makinson said: “Self-publishing has moved into the mainstream of our industry over the past three years. It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin. No-one has captured this opportunity as successfully as Author Solutions, which has rapidly built a position of world leadership on a platform of outstanding customer support and tailor-made publishing services. This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future.”

In 2011 Author Solutions generated revenues of approximately $100m, growing at an average annual rate of 12% over the past three years. Its business is split broadly evenly across three key areas: publishing, marketing and distribution services, with revenues generated primarily from services to authors.

The company has approximately 1,600 employees, located primarily in Bloomington, Indiana and Cebu City, the Philippines. Pearson will be expensing integration costs relating to Author Solutions in 2012 and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013, its first full year. Author Solutions will be integrated into Penguin’s back office and technology infrastructure but will continue to be run as a separate business.

UK, London & USA, Bloomington, IN and The Philippines, Cebu City

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Mecom to conduct a strategic review including, potentially, further disposals. Tom Toumaziz to step down as CEO

July 19, 2012 — Fusion DigiNet

The Board of Mecom Group plc has confirmed that it will be conducting a strategic review to examine all options for maximising shareholder value, including, potentially, further disposals.

Tom Toumaziz is to step down from his position as Chief Executive Officer in September.   Until then and as part of the transition he will assist Stephen Davidson, who will resume his previous role as Executive Chairman, in setting up the strategic review and in other matters.   Mr Toumazis will not be replaced as Group Chief Executive Officer.

The Group is announcing its interim financial results, which the report will be in line with market expectations, on 25th July.

Commenting, Tom Toumazis, said, “When I agreed to join the company in May last year, Mecom was a larger and different group to what it is today.  We had only just received an approach from Gremi to acquire Presspublica and approaches to acquire Edda were still some way off.   Both of these businesses have subsequently been sold, at very attractive valuations. All three of our remaining divisions are run by highly experienced executive teams and the Board and I have concluded that, particularly in light of the strategic review we are announcing today, the divisions will require much less central leadership than would normally be provided by a Group Chief Executive.”

Stephen Davidson, Executive Chairman, said, “Today’s announcement of a review of Mecom’s options is a logical step for the Company in light of the significant recent changes in the operating environment.”

Norway, Oslo & UK, London

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RPS acquires Australian consulting firm Manidis Roberts for up to A$30M

July 19, 2012 — Fusion DigiNet

RPS Group plc has acquired Manidis Roberts Pty Ltd, an Australian consulting firm, for a maximum consideration of A$30 million (£19 million).

Founded in 1988, MR is an environmental and project management consultancy headquartered in Sydney.   It currently employs about 90 staff and has developed a significant profile based upon the successful delivery of complex infrastructure projects.  These often last several years, providing long term revenue streams.  MR has particular expertise in the water, transport and power supply sectors, all of which are expected to grow in coming years. MR will further expand the RPS presence in New South Wales, complementing the skills of our urban planners, water, environmental and cultural heritage specialists and surveyors based in Sydney and Newcastle.

In the year ended 30 June 2011 the audited accounts for MR show revenues of A$27.2 million (£18.0 million, at an exchange rate of A$1.51 to £1) and profit before tax of A$5.8 million (£3.8 million).  Based on unaudited management accounts up to 31 May 2012 and an estimate of performance in June 2012, the revenue up to 30 June 2012 was in the order of A$23.7 million (£15.7 million) and profit for that period (after adjusting for non-recurring costs) was approximately A$5.2 million (£3.4 million).  Gross and net assets at 30 June 2012 were approximately A$ 9.4 million (£6.3 million) and A$6.4 million (£4.2 million) respectively.

RPS has acquired the entire share capital of MR for a maximum total consideration of A$£30 million (£19.9 million), all payable in cash.  Consideration paid at completion was A$18 million (£11.4 million), funded from the Group’s existing resources.  Subject to certain operational conditions being met, two further sums of A$6 million (£4.0 million), will be paid on the first and second anniversaries of the transaction.  If these operational conditions are not met, the deferred payments will not be made for 10 years.  The deferred amounts include the payment of market rate interest.  The vendors of the business are directors, staff and former staff.  The director and staff vendors are remaining with RPS.

Alan Hearne, Chief Executive of RPS, commented, “Although parts of the Australian economy are still feeling the effects of the global financial crisis, the RPS board continues to see selective investment in our Australian business as an attractive part of our strategy.  MR has an impressive track record and profile in markets likely to expand in coming years, particularly the provision of water, transport and power supply infrastructure.  We also see significant opportunities to introduce their skills to the energy infrastructure markets on both the east coast and in Western Australia”.

UK, London & Australia, Sydney

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Independent News & Media PLC to explore “strategic options” for its South African operation

July 18, 2012 — Fusion DigiNet

Independent News & Media PLC has just announced announced that it has appointed Investec and Canaccord Genuity Hawkpoint to explore a range of strategic options for its South African operation.

According to the announcement, “This process follows informal and unsolicited expressions of interest in respect of INM SA at a time when INM continues to assess a range of strategic options to delever its balance sheet.  No divestment decisions have been taken by the Company.”

Earlier today INM announced that Donal Buggy is to leave the group on 5th October, He will will be replaced as Group Chief Financial Officer by Eamonn O’Kennedy. Eamonn joined INM in 1999 as Group Finance Manager in the Group’s Head Office. In 2007, he was appointed Finance Director of the Group’s Irish operations and was appointed Finance Director of the Island of Ireland operations in 2011.

UK, London & Ireland, Dublin

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Publicis Worldwide in the USA, and the Kaplan Thaler Group to merge

July 18, 2012 — Fusion DigiNet

Publicis New York, part of Publicis Worldwide in the USA, and the Kaplan Thaler Group, part of the Paris-based Publicis Groupe, will merge to form Publicis Kaplan Thaler, effective immediately. The combined New York-based entity, with over 650 employees, becomes the U.S. flagship agency within the Publicis Worldwide Network of over 200 offices in 82 countries. Publicis Kaplan Thaler will be Publicis Worldwide in the USA’s flagship New York agency.

Publicis Kaplan Thaler will be led by Linda Kaplan Thaler as Chairman and Robin Koval as CEO. Rob Feakins, President and Chief Creative Officer for Publicis New York will continue in that role and lead creative for the expanded entity.

Susan Gianinno, Chairman and CEO of Publicis Worldwide in the USA stated, “Publicis Kaplan Thaler will build on the strong performances of Publicis New York, which includes the successful integration of digital agency Modem, and the Kaplan Thaler Group, to create a more dynamic New York base. Publicis Kaplan Thaler is poised to lead the change for its clients and the industry.”

In making the announcement, Publicis Groupe COO and Executive Chairman of Publicis Worldwide, Jean-Yves Naouri, said, “New York is the largest communications community in the world. We are deeply committed to building a stronger base of operations in this market – one that attracts and retains the best talent in the world to build our clients’ brands.”

Publicis Kaplan Thaler is designing new offices and will be headquartered in one location starting in early 2013.

France, Paris & USA, New York, NY

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Publicis Groupe acquires CNC – Communications & Network Consulting AG

July 18, 2012 — Fusion DigiNet

Publicis Groupe has acquired strategic communications consultancy CNC – Communications & Network Consulting AG . CNC will become part of MSLGROUP, the strategic communications network of Publicis Groupe. Terms of the deal were not disclosed.

Headquartered in Munich, CNC is an international strategic communications consultancy group. CNC, which employs around 100 professionals, is present in 14 cities across Europe, Asia, North and South America. Since its founding in 2002, the consultancy has regularly achieved double-digit annual growth.

CNC advises large corporations, mid-cap companies, institutions and individuals on all aspects of strategic communications within their specific markets. CNC’s services range from strategic communications and reputation management to financial communications, crisis counseling including litigation advisory, branding and public affairs.

CNC has been involved in more than 100 German IPO transactions with a total volume of more than €180 billion and has a particularly strong focus on cross-border mandates.

CNC will be aligned to MSLGROUP. Its leadership under CEO Dr. Christoph Walther remains unchanged.  MSLGROUP CEO Olivier Fleurot and MSLGROUP President for the EMEA region, Anders Kempe, will join CNC’s supervisory board where Mr Kempe will become Chairman.

Maurice Levy, Publicis Groupe Chairman and CEO, said,”CNC is one of the premier strategic and financial public relations firms in Europe, with a client base that is outstanding. I have followed CNC’s success story with interest and I am impressed by the company’s entrepreneurial spirit. The skill set will fit perfectly into our group and our strategy to make Germany one of our key hubs.”

France, Paris and Germany, Munich

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Care.com acquires Besser Betreut GmbH

July 18, 2012 — Fusion DigiNet

Care.com, an online service in the U.S. used by families seeking high-quality care providers,  has acquired Besser Betreut GmbH, an online destination for care and service providers in Europe.  Terms of the transaction were not disclosed.

Based in Berlin, Germany, Betreut will become an operating unit of Care.com and will continue under its current name, while also serving as Care.com’s European hub under the Care.com Europe banner.  Steffen Zoller, Founder and Co-CEO of Betreut and Manuel Nothelfer, Co-CEO of Betreut, will continue to manage the organization, reporting to Ted Preston, General Manager, International and SVP of Operations for Care.com.

In making the announcement, Sheila Lirio Marcelo, Founder and CEO of Care.com, said, “We have always believed that care is a global issue.  By bringing together Betreut and its extensive international operations with Care.com, our leadership position in the U.S., and our new operations in the U.K. and Canada, we are creating a dynamic portal for families around the world that provides best-in-class services to help families find the local care they need.”

Founded in 2006, Care.com currently counts close to 5 million families and providers in the U.S. and its recently launched operations in the UK (April 2012) and Canada (July 2012).  Betreut, which was founded in 2007, has approximately 2 million members and providers across more than 15 countries, including Germany, Austria, Switzerland,  France, Scandinavia, the Netherlands, and Belgium.

Both Care.com and Betreut help families address the unique lifecycle of care needs that every family goes through – child care, including special needs; senior care, pet care; housekeeping, and tutoring.

USA, Waltham, MA & Germany, Berlin

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Berkery Noyes releases first half 2012 M&A Report for the Media and Marketing Industry

July 18, 2012 — Fusion DigiNet

Berkery Noyes, an independent mid-market investment bank, has released its first half 2012 mergers and acquisitions trend report for the Media and Marketing Industry.

The report analyzes merger and acquisition activity in the Media and Marketing Industry for the first half of 2012 and compares it with activity in the four previous six-month periods from 2010 to 2011.

Total transaction volume increased six percent during the last six months, from 784 transactions in second half 2011 to 834 in first half 2012. Meanwhile, total transaction value increased 27 percent, from $24.88 billion to $31.51 billion. Despite this uptick, median enterprise multiples in the industry decreased. The median revenue multiple fell from 1.8x to 1.2x and the median EBITDA multiple declined from 10.0x to 7.8x. However, three segments had median revenue multiples of at least 2.0x: B2B Publishing, Broadcasting, and Exhibitions, Conferences, and Seminars.

Marketing was the most active industry segment for first half 2012, accounting for 262 transactions and surpassing Internet Media in transaction volume during the last twelve months. Although Internet Media activity declined two percent compared to second half 2011, it remained 19 percent above its second half 2010 levels. In the Marketing segment, 47 percent of deals were Digital Marketing transactions, which represented a 10 percent improvement on a half-to-half year basis. WPP Group was the largest acquirer in the Digital Marketing sub-segment as well as the overall Media and Marketing Industry.

The segment with the largest rise in volume in first half 2012 was Exhibitions, Conferences, and Seminars with an 85 percent increase. The median revenue multiple in the segment also increased 26 percent relative to first half 2011, from 1.9x to 2.4x.

Consumer Publishing M&A rose 13 percent, improving for the third consecutive half year period. The segment was led in first half 2012 by Berkshire Hathaway’s acquisitions of Waco Tribune Herald, The Bryan College Station Eagle, and 63 daily newspapers from Media General. In addition, the B2B segment was responsible for three of the top nine deals by value and underwent a 10 percent increase in transaction volume.

M&A volume in the Entertainment segment increased for the fourth straight half year, growing 24 percent in first half 2012. The largest related transaction in first half 2012 was Lionsgate’s acquisition of Summit Entertainment for $700 million. Video games, a sub-classification of Entertainment, rose 30 percent in first half 2012 and accounted for 62 percent of the segment’s deals. There was also a 50 percent increase in social gaming transactions during the last six months. The most notable social gaming deal by value was GREE International’s announced acquisition of Funzio, a mobile game developer, for $210 million.

“As we predicted in the press release for our first quarter report, there has been an impressive increase in M&A pertaining to social gaming,” said Evan Klein, Managing Director at Berkery Noyes. “Of the many possible means of monetizing social games, enticing users to purchase virtual currency and other rewards continues to be the most lucrative model for generating revenue.”

A copy of the FIRST HALF 2012 MEDIA AND MARKETING INDUSTRY M&A REPORT is available here.

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Guardian to make redundancies as losses increase

July 18, 2012 — Fusion DigiNet

Guardian News & Media, the publisher of the Guardian and the Observer, has asked journalists to consider taking voluntary redundancy after reporting an operating loss of £44.2 million for 2011. The newspapers are looking to save £7 million from the editorial budget this year as part of a five-year plan to save £25 million and to focus more on online publishing by 2016/17.

  • Operating loss grew 42 percent from £33.1 million to £44.2 million ($69 million)
  • Digital revenue growth of 16.3 percent to £45.7 million (making up for lost print revenue)
  • Overall company revenue stayed broadly unchanged from last year at £196.2 million
  • U.S. audience grew 80 percent to 20 million unique monthly readers
  • Total audience grew 38% to 67.8 million unique monthly readers

Editor-in-Chief Alan Rusbridger said: “Having the foresight to start exploring digital platforms as early as 1999 has given us a great foundation on which to build a secure future for the Guardian. This has been an extraordinary year for our journalism, all the more so for having the largest ever audience for our work.”

UK, London

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Kantar completes the acquisition of a majority stake in Press Index S.A. in France

July 17, 2012 — Fusion DigiNet

WPP’s wholly-owned operating network Kantar, the information, insight and consultancy group, has completed its acquisition of 1,446,139 shares, representing 87.76% of the share capital of Press Index. The deal was first reported on Fusion DigiNet on July 6, 2012.

As a next step, Kantar will launch a simplified cash public tender offer to purchase the remaining outstanding shares of Press Index. If, at the end of the public tender offer, the non-tendered shares represent less than 5% of the share capital of Press Index, Kantar intends to implement a squeeze-out procedure.

UK, London & France, Boulogne Billancourt

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