Rautakirja expands into Romania

Rautakirja, a division of SanomaWSOY Group, has signed a preliminary agreement to purchase 51% of the Romanian press distribution company Hiparion Distribution. The company concerned holds close to a 30% share of the Romanian press distribution market, and net sales in the current year are anticipated to reach around EUR 12 million. The deal will become effective in the autumn.

- This transaction is a continuation of Rautakirja's stated objective of expanding its core businesses into international markets. The distribution of newspapers and magazines is also an interesting area of international activity for Rautakirja's parent company, SanomaWSOY. SanomaWSOY already has magazine operations in the Romanian market, and hence we are also seeking synergy benefits through this move, says Rautakirja CEO Erkki Järvinen.

Hiparion Distribution was established in 1999, and the company has its head office and dispatch centre in Cluj-Napoca in the northwest of the country. In addition, there is a second dispatch centre in the capital, Bucharest. Transport of newspapers is handled primarily using Hiparion Distribution's own fleet. The company employs around 240 persons.

Hiparion Distribution is responsible for the distribution of around 300 titles, of which 60% are magazines and the remainder are newspapers. The company handles distribution directly to approximately 400 points of sale, and the products are also spread through 350 small wholesalers to around 4,500 retail outlets.

Rautakirja is purchasing its share of ownership from local publishers and the company's principal owner, Mr. Catalin Berari, whose holding after the transaction will be 48%. A publishers' association will retain a 1% share in the company.

The aim for Hiparion Distribution is to increase its market share substantially during the next few years. At present the value of the Romanian newsstand magazine and newspaper single copy market is around EUR 70 million at cover prices.

Rautakirja is the market leader in wholesale press distribution in Finland, Estonia, and Latvia. In addition, the company has operations in Lithuania and the Czech Republic.