Emap buys Thomson titles in pounds 21m deal

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The Independent Online
EMAP, the acquisitive media group, has paid pounds 20.7m in cash to Thomson Corporation of Canada for 14 business and specialist magazines, including Draper's Record, Broadcast and the newsagents' periodical CTN.

Some job losses are expected as the acquired firm, Thomson Information Services, is merged into Emap's existing business publishing division. Broadcast is to be merged with Emap's TV Week.

There are no plans to merge any of the other titles, according to Colin Morrison, chairman of Emap Business Publishing. He said efforts would be made to place redundant staff in other parts of the business.

The purchase puts Emap on a level with Morgan Grampian, part of United Newspapers, in market share of business publishing. Reed International is the largest player with annual sales of about pounds 100m.

Thomson Information Services is thought to have lost about pounds 3m to pounds 4m on turnover of pounds 19m in its last financial year. However, it would be 'earnings-enhancing from day one', Mr Morrison said. 'We've already identified some clear production savings.'

Emap has aggressively expanded into business publishing. It bought 26 titles from Maxwell Business Communications last March for pounds 21.5m. In August it paid pounds 4.6m for the Local Government Chronicle. Together with yesterday's deal, Emap now has 65 titles with annual turnover of about pounds 65m.

The acquisition, which also includes three directories and some exhibition interests, is being financed from the pounds 78m proceeds of Emap's rights issue last June.

Emap stressed that several of the titles had significant continental circulations and advertising revenues. These include TV World, Screen International, Communications International and International Broadcasting, which together have turnover of pounds 4.75m.

The disposal by Thomson follows its decision, announced this week, to scale down its free newspaper business in Britain and close some of its paid-for titles in North America because of declining advertising volumes. It has about 70 weekly free titles in Britain. It said the closures would result in a dollars 170m charge against fourth-quarter earnings.

Thomson retains some of its other business titles in the UK, including International Financing Review and Construction News.

Emap shares were marked 4p higher to 334p. That compares to the rights issue price of 230p.

Despite flat advertising revenues, Emap has lifted earnings by attacking costs. In the six months to 3 October it made pre-tax profits of pounds 14.8m, up 50 per cent. Underlying earnings per share rose 20 per cent.

The main engine of growth in the past has been the consumer magazines division, which publishes Smash Hits, New Woman and Slimming magazines. It is now placing more emphasis on its business division.

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