SanomaWSOY acquires the leading Russian magazine publisher Independent Media
Sanoma Magazines, a division of the SanomaWSOY Group, has entered into an agreement to acquire Independent Media Holding B.V., its subsidiaries and its associated companies (IMH Group). Independent Media consists of six main operating companies in Russia and Ukraine. The enterprise value amounts to some EUR 142 million. The acquisition is subject to the approval of both the Russian and Ukrainian competition authorities as well as satisfactory agreements with certain licensors regarding the continuation of the respective license agreements.
The transaction will be financed using existing short-term credit facilities. The closing of the acquisition is expected during the second quarter of 2005. The transaction is expected to have a positive effect on SanomaWSOY?s EPS already in 2005, depending on the purchase price allocation and the final amount of amortisation on intangible assets.
Independent Media, through its subsidiaries and joint ventures in Russia and Ukraine, publishes 31 consumer and business magazines as well as 3 newspapers. Independent Media's portfolio includes such successful, internationally known magazine brands as Cosmopolitan, Good Housekeeping, FHM, Men's Health, as well as Russian newspapers Moscow Times and Vedomosti, among others.
- With Independent Media, we will become the leading consumer magazine publisher in Russia and obtain a position in Ukraine. With its 52 million households, Russia offers great growth opportunities, says Hannu Syrjänen, President & COO of SanomaWSOY.
- It has been our long-term plan to enter the Russian market, and we have been looking for a good acquisition target. Independent Media is the market leader in Russia and is an excellent fit for us. The company has a good portfolio of known brands. We share a similar view about the magazine business, the importance of constantly developing customer relationships and a quality product portfolio, Syrjänen emphasizes.
- This is also a significant step for SanomaWSOY, since it is our opening to Russia and Ukraine. Expanding our magazine operations to these countries is a logical continuation of our growth strategy. This also widens SanomaWSOY's opportunities to enter the Russian press distribution market, he continues.
- The Russian market is very interesting to us, because both advertising spending and the readers' market are growing fast. Independent Media is well positioned in the market: through this acquisition we will become the leading publisher in relevant segments, comments Eija Ailasmaa, President of Sanoma Magazines.
- For our future, Independent Media is a springboard for further expansion not only in its present markets but also in new regions and markets in CIS (Commonwealth of Independent States) countries, Ailasmaa continues.
- I'm very confident about the future of Independent Media within Sanoma Magazines, comments Derk Sauer, CEO of Independent Media. - Being part of Sanoma Magazines will make it possible for Independent Media to enter new markets and secure long-term growth. This is a new and exciting chapter in the our history and I'm proud to lead the company into its new future, he continues.
Independent Media estimated net sales including the sales of 50/50 joint ventures in 2004 amounted to about EUR 70 million, of which Sanoma Magazines' pro forma consolidated share is some EUR 47 million. The corresponding pro forma consolidated EBITA in 2004, including the share of associated companies, is EUR 10 million. Independent Media?s average growth of net sales during the last three years has been 25% and that of EBITA 50%. Independent Media has 990 employees. It will become part of Sanoma Magazines International.
Press and analyst meeting about the acquisition in Finnish will be held today, 19 January 2005, at 1.30 p.m. (Finnish time) in SanomaWSOY's premises (Ludviginkatu 6 ?8, 6th floor).
Presentation material in English and Finnish will be available on www.sanomawsoy.fi shortly after the meeting has started.
The conference call in English for analysts and investors will be held today at 4.00 p.m. Finnish time. The instructions about the phone conference will be published in SanomaWSOY's web pages.
Background information on Independent Media
Background information on SanomaWSOY Group
Background information on Sanoma Magazines
About Independent Media
Independent Media, founded in 1992, operates mainly in Russia and Ukraine. In Russia, it comprises four main operating companies: Fashion Press, United Press, Business News Media, and Neva Media. Independent Media is the leading magazine publisher focusing on glossies for both women and men. In 2003, its share of Russian advertising market in its own segment was 27%.
Fashion Press, a joint venture with Hearst Holdings Inc., publishes licensed magazine titles such as several regional editions of Cosmopolitan as well as Robb Report, BAZAAR, and Good Housekeeping.
United Press, a fully owned subsidiary of Independent Media, is the publisher of the daily newspaper Moscow Times and the magazines Men's Health, FHM, Harvard Business Review Russia, Top Santé, and Yes! Fabrika Zvyozd. United Press also publishes business-to-business magazines in the agro business and food business.
Business News Media, a joint venture with Dow Jones & Company Inc. and Pearson Overseas Holding Ltd. UK, is the publisher of the national business daily Vedomosti.
Neva Media is the publisher of the newspaper St. Petersburg Times that comes out twice a week.
In addition, Independent Media has a 50% share in Alpina Business Books, a book publisher focusing mainly on management literature. The Group also has custom publishing operations.
In Ukraine, Independent Media has two subsidiaries. IMH Ukraine, a joint venture with Hearst, publishes the Ukrainian edition of Cosmopolitan and a fully owned subsidiary, IM Ukraine, publishes FHM and Men's Health.
SanomaWSOY is the leading media group in the Nordic region and a strong player in the European arena. In Finland, the Group has a wide portfolio of media activities. Internationally, it focuses on magazine publishing, educational materials, and press distribution.
The Group comprises five divisions: Sanoma Magazines is one of the five largest magazine publishers in Europe; Sanoma is Finland's leading newspaper publisher; WSOY is Finland's largest book publisher and Europe?s sixth largest educational material publisher; SWelcom focuses on electronic media in Finland; and Rautakirja is the market leader in press distribution and specialised retailing in Finland and the Baltic countries. SanomaWSOY net sales in 2003 were some EUR 2.4 billion and the Group operates in 17 European countries.
About Sanoma Magazines
Sanoma Magazines publishes over 250 magazines in ten European countries. Its 2003 net sales totalled EUR 1.1 billion and it employs approximately 4,500 people. Sanoma Magazines International, a business unit of Sanoma Magazines, is responsible for magazine publishing in Central and Eastern Europe: Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Serbia & Montenegro, and Slovakia.
Slideshow about the acquisition