Centaur Media, the firm behind trade rags such as Marketing Week and the Lawyer, is to boost its underdeveloped web operation by purchasing e-commerce and marketing business Econsultancy in a deal worth £50m.
The business-to-business publisher has paid an initial £12m in cash for the UK company, which has 11,000 registered users and about 5,000 paid-for subscribers to its services, with a further maximum of £38m payable in 2016 dependent earnings targets.
As well as its digital subscription business, Econsultancy, which was founded in 1999, the company runs events, training and professional qualifications. It is not known how it will fit in with New Media Age, Centaur’s own digital publication, although the firm insists it will “fit well”.
The deal, which needs shareholder approval, will be seen as a major coup in terms of digital business. Like its arch rival Haymarket, Centaur was heavily reliant on the recruitment advertising model and has been slow to adapt to the Internet age.
Over the past few years it has closed and disposed of many titles as it tries to rationalise the company around three core areas, marketing, finance and engineering. However, this has come at a price, with its latest results showing a pre-tax loss of £30.3m, including redundancy costs of £2.5m.
Econsultancy’s key staff, including chief executive and founder Ashley Friedlein, will stay with the business under the new ownership.
In the year to 31 December 2011, Econsultancy reported revenues of £6.6m, a 50% year-on-year increase, and adjusted earnings before, interest, tax and amortisation of £1.1m. The company employs 60 staff.
Centaur Media chief executive Geoff Wilmott said: “The earnings-enhancing acquisition of Econsultancy provides us with an exciting opportunity to acquire a leading information brand in a high-growth sector with global potential which fits well with Centaur products including Marketing Week and New Media Age.”
Centaur shake-up fuels £30m loss