Not sure what to make of this story since it may or may not be related to publishing, but to wit: Forbes reports that the U.S. unit of Anglo-Dutch information and publishing company Reed Elsevier hired Barbour Griffith & Rogers LLC to lobby the federal government, according to a disclosure form. The firm will provide advice on policy issues important to the publishing industry, according to the form posted online Friday by the Senate’s public records office, though I can’t help but wonder if there’s some connection with Reed’s own connection to the arms industry – even though it claims it’s getting out of that business by year’s end…
Posts Tagged ‘Reed Elsevier’
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Pearson‘s acquisition of Harcourt Education in the UK has escaped a possible referral to the Competition Commission, according to the Bookseller. In a statement put out Friday, the Office of Fair Trading said it had decided, based “on the information currently available to it”, not to refer the completed merger to the Competition Commission. It did not go into further detail, but added that the text of the decision would be placed on the Office of Fair Trading’s web site at www.oft.gov.uk soon.
Pearson Education acquired Harcourt Education from Reed Elsevier in May for $950m. But the OFT announced in June that it was considering whether the deal would result in “a substantial lessening of competition” in the UK’s educational publishing market, forcing Pearson to put its integration plans on ice
Reed Elsevier has signaled its intention to find a buyer for its 11.8 percent stake (valued at approximately $300 million) in Riverdeep, according to the Irish Independent. The stake forms part of Reed Elsevier’s recent deal to sell its Harcourt US schools education business to HM Riverdeep, which is headed by Barry O’Callaghan, for $4m.
It is understood that Reed agreed to take a stake in order to appease the debt backers of the HM Riverdeep deal, which will create a publishing giant with an enterprise value of about $10bn. Some $7.4bn of this will be comprised of debt. “We don’t take the view that’s a long-term shareholding,” Reed’s chief executive Sir Crispin Davis was quoted as saying yesterday, raising the spectre of the stock being sold soon after the deal is completed. Meanwhile, Sir Crispin said he was confident that HM Riverdeep had the financing in place to complete the transaction, expected to close in late 2007 or early 2008 after regulatory reviews have been completed.
After selling off Harcourt Education to Houghton Mifflin Riverdeep – in which it still has an 11.8% shareholder stake – Reed Elsevier said it would take another look at its balance sheet once the two Harcourt disposals complete, according to the Telegraph. One way is to sell off that minority share and borrow more money for further acquisitions. “We do recognise that when education completes we are in a new situation and we should look at this again,” said Reed CEO Sir Crispin Davis.
Houghton Mifflin Riverdeep is buying Reed’s US schools business for $4bn, while Pearson has agreed to buy the Harcourt assessment wing for $950m. Both deals should complete by the first half of 2008. Lorna Tilbian, an analyst at Numis Securities, said: “A strong case can be made that Reed is underleveraged and we believe there is scope for the group to increase its rolling share buyback”. The recent flurry leaves Reed focused on its science and medical education wings, which Davis is primarily happy about. “I have no ambition to go into any new sectors,” he said, adding he was particularly interested in acquisitions within online health and risk management, where “credit card fraud and employee screening are fast-growing areas”.
Reuters reports on Reed Elsevier‘s adjusted first-half operating profits, which rose 3 percent to 530 million pounds ($1.09 billion) and that it was on track to post adjusted earnings per share growth of at least 10 percent. Reed Chief Executive Crispin Davis said market conditions were “generally favorable” and the company was well placed for a strong second half.
The Bookseller reports this morning that the Office of Fair Trading has confirmed that Pearson has agreed to run Harcourt Education as a separate business until the conclusion of its investigation into the group’s purchase of the education unit previously owned by Reed Elsevier. John Fallon ,CEO of Pearson Education Asia, Europe, Middle East and Africa, said the group had anticipated the OFT’s interest: “We always knew that we would have to run the businesses separately until the OFT had time to look at the acquisition. The OFT enquiry is a matter of course in that, as Harcourt is the market leader in the UK, we fully expected that the OFT would want to look at the acquisition.”
The Bookseller’s Alison Bone reports that the Office of Fair Trading is considering whether Pearson Education‘s $950 million acquisition of Harcourt Education from Reed Elsevier will result in “a substantial lessening of competition” in the UK’s educational publishing market. The deal, unveiled in May, gives Pearson Education about 23% of the UK schools market, more than former market leaders Oxford University Press and Nelson Thornes.
The OFT is asking for representations from interested parties by 4th July. If it finds the deal has created a “relevant merger situation”, it will then consider whether the deal could “result in a substantial lessening of competition” in the UK, and if it should be referred to the Competition Commission for further investigation.
Publishers Marketplace alluded to this in Sunday night’s email but the Times has more on the decision by BEA‘s parent company to extricate itself from the arms world after a sustained campaign from doctors, healthcare groups, authors and pacifist organizations. Reed Elsevier‘s biggest arms fair is the Defence Systems and Equipment International, which is held every two years at Londonâ€™s Excel arena. The group will stage the next show in September but will quit the defense exhibitions sector by the second half of this year.
Sir Crispin Davis, chief executive, said: “Our defence shows are quality businesses, which have performed well in recent years. Nonetheless, it has become increasingly clear that growing numbers of important customers and authors have very real concerns about our involvement in the defence exhibitions business. We have listened closely to these concerns and this has led us to conclude that the defence shows are no longer compatible with Reed Elsevier’s position as a leading publisher of scientific, medical, legal and business content.”
The Times of London’s “Mediapolis” column looks at the recent spate of acquisitions by private equity of publishing firms and wonders, in the wake of the Thomson-Reuters merger, who’s next. “United Business Media‘s PR Newswire looks especially tasty,” they write, “as does Emap Communications. Others include Euromoney, Centaur and Reed Elsevier‘s Lexis Nexis or Butterworths division.” And even though many mergers, or those in the wings, don’t have a lot of financial specifics, private equity firms are “lured by a business model with solid revenue from subscription renewals rather than less stable advertising and titles with niche strongholds.” Which means there could be yet more partner-changing in the not-too-distant future, too…
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