Future Publishing swallows NewBay
NewBay Media, the US publisher of titles including Guitar World and Music Week has been acquired by Future Publishing for net consideration of $12.25m (£8.62m) cash and $1.55m (£1.09m) shares, with a further potential deferred consideration of up to $5.60m (£3.94m) in January 2019, depending on the future performance of the acquired business.
Ironically, as pointed out today in the UK trade publication, Music Business: ‘the figure is believed to be less than NewBay itself paid for Intent Media, the previous publisher of Music Week and the company which effectively became its UK division, in December 2012.’ NewBay was also the publisher of the recently closed MI trade title MI Pro. Music Business adds: ‘According to filings on Companies House, London-based NewBay Media Europe Ltd’s annual revenue fell from £11.94m in 2012 to £7.57m in 2016. Net profit fell in that time from £1.08m to a net loss in 2016 of £362,000’.
In a statement, Future says: ‘Newbay’s information and events business operates in three key verticals: Television & Video, Entertainment & Educational Technology and Music. Newbay’s market leading brands include Music Week, Twice and Broadcasting & Cable. Newbay generated EBITDA of $4.2m in the year ending 31 December 2017.’ The company goes on to say that the acquisition: ‘…expands Future’s reach into the US market’ overlooking the fact that Guitar World, Revolver and Guitar Aficionado were purchased by NewBay from Future in 2012.
Future says it has financed the purchase: ‘in part by an increase in Future’s debt facilities of £5m with the remainder of the cash consideration, as well as the expected cash consideration of the acquisition of the Haymarket titles recently announced, funded out of existing debt facilities.’
Future, which will announce interim results on 17th May, commented on its current performance as follows: ‘Revenues from the Magazines division have continued to decline in line with expectation, however, the growth in revenue from the Media division, with particular strength in the US, has more than offset this decline. As a result we are trading comfortably in line with management expectations and believe that the US based acquisition will help further capitalise on the US opportunity’.
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