Reed-Elsevier announced last Thursday that it is putting most of the American magazines in its Reed Business Information portfolio up for sale after a "very difficult first half." According to MediaPost News the magazines for sale include some familiar media trade publications like Broadcasting & Cable and Publishers Weekly. However, Reed Business Information is said to be holding on to Variety, Reed Construction Data, MarketCast and some other non-media trade publications.
This is the second time Reed has put its American B2B business up for sale. Reed Business Information launched a tentative auction in 2008, but then changed its mind when the bids were unsatisfactory, reflecting the worsening economic situation. B2B titles have long suffered from Internet competition, combined more recently with the effects of one of the worst recessions in decades. In Australia the strength of Reeds online products is a major contrast to Reeds overseas asset performance.
The company, which employs 34,000 people, said the estimated 850 million pounds fundraising was necessary because a major acquisition last year left it with more debt than was prudent.
Reed spent 2.1 billion pounds on risk management company ChoicePoint, a provider of data and analytical information to the insurance sector, last year.
The move came as Reed said the economic downturn was having an impact on "even our most resilient businesses" as it warned results in constant currency terms were likely to be under some pressure this year and going in to 2010.
As well as the Business Information unit, the company is based around Elsevier, its science and health information arm, as well as Reed Business exhibitions and legal division LexisNexis.
"This has been a difficult decision to reach as there are many strong brands here, with very experienced and professional teams running them, but we have concluded that they are less well suited to Reed Business Information's strategy going forward," Reed Business Information Global CEO Keith Jones said in an interview with Variety magazine (a Reed publication), "We have decided to focus our efforts and investments on a narrower range of brands and markets. We have to contend with a far harsher advertising environment than any of us have experienced before and, in such a climate, we have to focus not just on innovation and efficiency, but also on ensuring that our portfolio is well-matched with our long-term ambitions."
He continued: "I believe we have all the ingredients to build a world-class B2B media company, with online products and services providing an increasingly important revenue stream, where we engage more closely with our customers, meeting the evolving needs of users and advertisers with some of the very best brands in B2B media; and all of this underpinned by the most creative and dedicated people in the industry."
According to MediaPost News, total global revenues at Reed Business International fell 17 per cent in the first six months of 2009 compared to the same period last year, when currency fluctuations are taken in to account. In current US dollar terms, they fell from US$877million last year to US$728 million this year. US revenues, which make up 30 per cent of the international business, fell 26 per cent. Overall, Reed Elsevier carries just under US$8.5 billion in debt.
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