U.K. firm buys CMP Media
After heavy restructuring efforts and across-the-board job cuts, CMP Media says it will be bought by U.K.-based United News & Media in a cash deal worth $920 million.
Under the agreement, United News & Media said it plans to buy the New York-based technology media company for $39 per share, a net total consideration of $920 million after deducting cash on hand of $27 million. United said that members of the Leeds family and related trusts, which hold more than 68 percent of CMP stock, have agreed to tender their shares.
CMP's Internet assets, such as CMPNet, and its tech publications, such as Information Week, combined with the trade show and publishing businesses of United's subsidiary Miller Freeman, will give Miller Freeman leverage in the media market and in the "global high-tech sector," United said in a statement. In addition, United said the acquisition also boosts Miller Freeman's position as an online provider of products and services for the tech sector.
Along with the combination of CMP and Miller Freeman tech products, United projects $35 million in online revenues for the merged businesses in 2000, and rapid growth in future years. United also said it will research external funding options for the online business by the end of this year.
Unisted said the online brands, which include TechWeb and the ChannelWeb portal site for the electronics industry, all have joint ventures or plans for adding e-commerce revenue streams to their advertising revenue.
"The two businesses have developed good positions on the Web, and CMPNet in particular is the leading business-to-business site for the high-tech industry, and we can fold a number of our very strong Web positions from Miller Freeman into it," United chief executive Clive Hollick told Bloomberg News in an interview. "I think that we're going to create a very attractive Web company, which we have plans to list separately later on this year."
Hollick said the company probably would do a tracker stock, noting what CMP competitor Ziff-Davis has done with ZDNet, and said the firm is planning the move for the end of this year.
In early March, CMP got attention from a number of possible suitors, such as Netherlands-based publisher VNU and U.S.-based tech publishers Ziff-Davis and IDG. As previously reported, this came after CMP, which suffered from slumping advertising revenue due to the unstable Asian economy and product delays, announced it would cut its workforce by 4.6 percent.
However, Hollick predicted a positive turnaround in the near future. "It's been a cyclical industry; it's driven very much by product releases," he told Bloomberg. "Last year we saw a combination of no product releases and the downturn in the Asian economy, which particularly affected Asian advertisers, so I think there's every expectation that the market's going to turn around and move ahead nicely next year."
Following the acquisition, which is expected to close in 25 business days, all CMP and Miller Freeman high-tech products will be brought under a single CMP brand and management structure, United said in a statement.
The acquisition will be funded from United's banking facilities and is expected to have a neutral impact on its earnings per share in 2000 before investment in the online business.
The company said investment in new products and growth of the online business is expected to boost earnings.
Bloomberg contributed to this report.