IPC Media has been bought by AOL Time Warner for £1.15 billion, the company confirmed late yesterday, ending weeks of speculation about the takeover (see AOL Time Warner Thought To Be Close To IPC Deal).
The consumer magazine publisher, which produces more than 100 titles including
Loaded and
Woman’s Own, is currently owned by venture capital company Cinven. Financial backing for the £860 million management buy-out of IPC from Reed Elsevier in 1998 was provided by Cinven. The deal with AOL Time Warner will see Cinven dispose of all its interests in the magazine group.
AOL Time Warner is the world’s largest media group and IPC Media is the UK’s largest consumer publisher, with a combined circulation of more than 350 million magazines annually.
IPC’s chief executive, Sly Bailey, will remain with the group, reporting to Michael Pepe, president and CEO of Time, AOL’s magazine publishing division and technically the buyer of IPC. For Time the acquisition represents a very effective entry into the UK and European magazine markets.
Don Logan, chairman and CEO of Time, said: “This is the perfect acquisition for AOL Time Warner because it accomplishes key strategic goals for the company. With some of the best known consumer publishing brands in Europe, IPC provides Time Inc. with an important presence within the European consumer publishing sector. This acquisition also furthers AOL Time Warner’s goal of expanding our operations outside of the US.”
AOL is aiming to eventually achieve half of its revenue from non-US businesses. Analysts at ABN Amro believe that this deal is significant step towards that goal. The price tag of £1.15 billion represents around 13x 2001 EBITDA for IPC; this is slightly higher than the usual 10x paid in similar deals, says ABN. However, with cost savings factored in the price moves closer to 11x.
