- Exponent Private Equity to acquire all non-BBC branded magazines in full; plus rights to publish BBC branded titles under licensing and contract publishing arrangements;
- Transaction has full BBC Trust approval and is expected to complete in autumn 2011, following OFT clearances;
- Exponent also to acquire BBC Magazines' stake in Dovetail (subscriptions fulfilment) and Frontline (distribution); it will also acquire full control of specialist publisher Origin;
- Bennett, Coleman & Co. Ltd to acquire BBC Magazines' 50% shareholding in Indian joint venture Worldwide Media Ltd;
- Transactions will deliver a total of £121m to BBC Worldwide, supporting increased returns to the BBC and continuing investment in British content;
- Further details of transaction and new company to be established by Exponent, to be announced after completion;
- BBC Magazines staff and operations to transfer to the new company on completion.
BBC Worldwide and Exponent Private Equity ("Exponent") today announce that they have signed a sale and licensing agreement for the publication of titles currently published by BBC Magazines, BBC Worldwide's consumer magazines business. Under the terms of the deal Exponent will acquire, in full, Radio Times and a number of magazines less closely aligned to the BBC, as well as the rights to publish BBC-branded titles under licensing and contract arrangements.
The transaction received full approval from the BBC Trust on 21 July and today's announcement concludes a rigorous process. Completion is expected to take place in the autumn, following clearance from the Office of Fair Trading.
Exponent is also to acquire BBC Magazines' 50% stake in Dovetail, its subscriptions fulfilment company and its share of distribution business, Frontline. In addition, Exponent will acquire specialist publisher Origin Publishing ("Origin"), in which BBC Magazines currently holds a minority stake.
At the same time, BBC Worldwide announces that it has agreed the sale of a 50% shareholding in Worldwide Media, a publishing joint venture in India, to fellow shareholder, Bennett, Coleman & Co. Ltd, owner of The Times of India.
These transactions will deliver a total of £121m to BBC Worldwide, with the majority of the proceeds going back to the BBC.
Commenting on the deal with Exponent, John Smith, CEO of BBC Worldwide, said: "BBC Magazines is a world-class magazines business, with an incredible depth of talent across editorial, publishing, marketing and commercial. It continually provides readers with the highest quality content, has launched successful new titles in the UK and overseas, and has strongly outperformed the UK market in recent years.
"The deal announced today offers the best prospects for the magazines business to continue on this path of success, while BBC Worldwide pursues a strategy increasingly focused on international video and digital services. The consumer magazines market faces a number of challenges, and this transaction brings a focus and degree of investment that BBC Worldwide alone is unable to provide."
Also commenting on the deal, Richard Lenane of Exponent, said: "We are delighted to have signed an agreement with BBC Worldwide for its magazines business, pending OFT approval. Exponent invests exclusively in market-leading businesses which have strong growth potential and great people. We believe that BBC Magazines is such a business.
"We look forward to working with the BBC Magazines team and in partnership with BBC Worldwide to continue to develop the BBC magazine franchise and to take advantage of the growth opportunities afforded to the business outside BBC Worldwide ownership."
Under the terms of the deal, the titles and brands currently published by BBC Magazines will fall into one of three categories:
- Sale - Radio Times and a number of magazines less closely aligned to the BBC, including olive and Gardens Illustrated, are being sold outright to Exponent;
- Licence - BBC and BBC programme-branded titles will be licensed (including Gardeners' World, BBC Wildlife), with BBC Worldwide not retaining ownership but keeping a strong continuing editorial interest under licensing agreements;
- Contract - Titles relating to key BBC Worldwide brands (Top Gear, Good Food and Lonely Planet) will be retained by BBC Worldwide and published by Exponent under contract publishing arrangements.
The regulatory process is expected to take around 40 working days and a further announcement will be made by Exponent upon completion. The majority of BBC Magazines staff and BBC Magazines' operations will transfer to the new company when the deal completes.
NOTES TO EDITORS
- With titles dating back to 1923, when the first issue of Radio Times was produced, BBC Magazines has grown to become the UK's fourth largest consumer magazines publisher by circulation, and number three by retail sales value. Its portfolio of over 30 high-quality consumer magazines and associated websites covers a wide range of specialist and lifestyle genres, as well as a stable of popular children's magazines. In the last ABC results (July-December 2010), BBC Magazines delivered an overall best-in-class growth in circulation of 0.5% , with many of its titles retaining their market-leading position and total annual sales now stand at almost 85 million copies. It is also the UK’s number one publisher for subscriptions. Internationally, the business has 62 licensed editions of its titles published across 60 territories by international publishers.
- BBC Worldwide will create a small in-house unit to oversee the management, editorial compliance and contractual relationship between BBC Worldwide and the new company.
- BBC Worldwide will acquire the 61% of Origin that it does not already own, before transferring 100% of the equity to Exponent, subject to the same conditions as the sale of BBC Magazines.
- BBC Worldwide Limited is the main commercial arm and a wholly owned subsidiary of the British Broadcasting Corporation (BBC). The company exists to maximise the value of the BBC’s assets for the benefit of the licence fee payer and invest in public service programming in return for rights. The company has six core businesses: Channels, Content & Production, Sales & Distribution, Consumer Products, Brands, Consumers & New Ventures and Magazines, with digital ventures incorporated into each business area. In 2010/11, BBC Worldwide generated profits of £160 million on sales of £1158 million and returned £182m to the BBC. For more detailed performance information please see our Annual Review website: www.bbcworldwide.com/annualreview;
- Exponent is a private equity firm investing in UK headquartered businesses with an enterprise value of between £75m and £350m. It typically targets companies that are market leaders, supporting management to grow their businesses. Formed in 2004, it invested its first fund of £400m in nine companies before raising a second fund of £800m, and is currently investing from this second fund. Exponent’s current portfolio includes: Ambassador Theatre Group, the largest owner and operator of theatres in the UK; Radley, one of the leading suppliers of premium branded handbags in the UK; and Trainline, the UK's leading internet retailer of train tickets. Most recently Exponent announced its acquisition of Quorn Foods, the meat-free business of Premier Foods plc, and Pattonair, the supply chain division of Umeco plc.