fipp.com December 2007 | Magazine World | 35
The two big magazine groups, ACP and Pacific
“While Emap was changing,
Magazines, themselves part of multimedia
companies, were acquired by or partnered up with
the world around us was
private equity groups.
In this fast, consolidating market, premium
prices were being paid for quality media assets
changing faster”
– EBITDA* transaction multiples were in the range
of 11.8 and 14.5, and Australian media companies
were being traded at an average of 13.4 times
Of course, a good exchange of staff between FY2007 EV/EBITDA**, a significant premium to US
London and Sydney helped to cross-fertilise the and European magazine businesses that average
company’s values. Emap Australia had a string multiples of 9.7. Time Warner recognised this and
of brilliant managing directors. They were sent put its Australian subsidiary on the market in early
from Emap UK as capable, promising managers 2007. They were acquired by Pacific Magazines
and all came back (some kicking and screaming in July for a figure reported to be A$85 million
and wanting to stay, it must be said!) ready to (€53million) and a probable multiple of 15
take on bigger roles. Marcus Rich, now running times EBITDA.
Emap’s London Lifestyle division, was the first. In addition, for Emap Australia to be consistent
Philip Thomas, now running the Cannes Lions; with the group’s overall strategy, the company
Rob Munro-Hall now of Emap’s Men’s and needed to build a media business of scale.
Entertainment division; and most recently, Carrie However, we had a market share of only some
Barker, all brought their unique style and skills to five per cent, but the two leading companies not
both Emap and the Australian magazine industry. only had more than 70 per cent of the magazine
Rob became the chairman of the Australian MPA, market, but also strong TV and digital interests.
another proud moment for the company. Our organic plan to develop both our magazine
So why exit this market that had proven so position and a strong digital platform was bold
profitable for Emap? The answer is that while and exciting, but clearly risky when set against
Emap was changing, the world around us was these highly advantaged competitors.
changing faster. At the time we announced a strategic review for
In October 2006, Australian media ownership Australia, we also announced an investment in
laws changed. Previous restrictions were India where we have acquired 40.1% of Next Gen
liberalised and a media land-grab was triggered. Publishing. In short, we can build a business
Newspaper and magazine groups merged. News of scale in India and get a significant return on
International bought number three magazine our investment.
company, FPC Magazines, publisher of 19
magazines (including Notebook and the local Chris Llewellyn is the international
edition of Vogue) for A$185 million (€115 million). managing director of Emap plc
Notes:
* EBITDA = Earnings Before Interests
Tax Depreciation and Amortisation
** EV/EBITDA = Enterprise Value over EBITDA
pp34-35_AsiaEmap_v1r_corr1.indd Sec1:35 20/11/07 16:32:47
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