The acquisition delivers Seven Network the core publishing categories of lifestyle/homemaker, women’s fashion and men’s lifestyle, and combines with Pacific Publications to significantly broaden Seven’s magazine publishing presence in Australia in circulation and revenue.
Under the terms of the agreement unveiled today, Pacific Publications will acquire Murdoch Magazines from Handbury Holdings and associated Handbury entities for $77m, of which $32.5m is satisfied in TELYS (Seven’s convertible reset preference shares) plus a subsequent year payment dependent on the performance of the magazine titles. This amount is capped at $3m. Murdoch Books is not part of the acquisition.
Murdoch Magazines has long-standing licensing agreements with its publishing partners: Meredith International (Better Homes and Gardens), Marie Claire Album SA (marie claire) and Rodale (Men’s Health).
Ryan Stokes, Pacific Publications chairman, says, “The acquisition significantly strengthens Pacific’s publishing platform and will utilise the efficiencies of the combined group to drive improved margins. Pacific will consolidate its leading positions across key magazine categories and enhance our advertising offerings.”
Matt Handbur, Murdoch Magazines executive chairman, says, “This is a good move for the magazine industry. Placing these market leading magazines into an expanded Pacific Publications will play a key role in further consolidating the industry and delivering a strong competitive marketplace. Seven and Pacific are in a strong position to further accelerate the momentum we have built up at Murdoch Magazines over the past decade.
“I wish to personally acknowledge everyone at Murdoch Magazines and highlight what we have achieved. It has been a privilege sharing the journey with them. Everyone will be well-placed to take the expanded Pacific to even higher levels.”
The acquisition is earnings per share positive for Seven after amortisation and synergies, and funding costs. The combined group will have total revenues in excess of $200m. The company will move to an increased, total circulation share of 24 per cent of all magazines sold in Australia and a 17 per cent share of all magazine advertising revenue.
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