United Business Media bolstered its portfolio of property magazines yesterday with the £79m acquisition of a company focused on the UK building and construction market.
The group bought Aprovia UK, owner of the Builder Group and Barbour Index, from a private equity consortium one year after it was acquired from Vivendi Universal as part of a fire-sale package of assets by the French media giant.
The cash-rich UBM said the deal would enhance earnings this year, strengthening its CMP Information division, which spans titles such as Travel Trade Gazette and Information Week. It catapults CMPi from a 6 per cent to a 30 per cent share of the construction media market, ahead of rivals Emap and Reed.
"This move is further evidence of our ambition to building our professional media business in the UK," Lord Hollick, the chief executive, said. It follows the group's recent purchase of Property Media and The Interior Design Handbook.
Bernard Gray, who heads CMPi, said "some job losses" were likely, "probably in support functions areas like finance", although Aprovia's top two managers have been asked to stay. UBM is targeting £3m of cost savings.
Meg Geldens, an analyst at Investec Securities, estimated the deal would increase earnings per share for 2004 by 5 per cent, "helped by the fact that UBM is trading low-yielding cash for a high margin publishing business".
Mr Gray said UBM had been eyeing Aprovia's UK business-to-business arm, which includes an event organiser, for the past two years. It did not bid in the original Vivendi auction last year because it was not interested in Aprovia's medical and European interests, he added.
He said the deal would give CMPi "access to people across the whole life cycle of the construction market". It follows the recent purchase of Property Week, a magazine aimed at the property letting market that it co-owned with the Builder Group.
Aprovia UK had revenues last year of £31.7m and operating profit of £6m. The company's net tangible assets were £12.8m.
UBM, which has a 35 per cent stake in the television channel Five, has spent the past two years turning round CMPi's financial performance. Operating profits at the division, which barely managed to break even two years ago, almost doubled to £12.7m last year.
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