Video Arts sells out in pounds 25m deal

NIGEL COPE

Video Arts, the management training company founded by the comic actor John Cleese, has been sold for around pounds 25m to MediaKey, a media group that has announced plans for a stock market listing.

It is the second time Video Arts has been sold since Mr Cleese founded the company in 1972 with Sir Anthony Jay, the author of the Yes, Minister series.

After building a high-profile business with videos such as Meetings Bloody Meetings and enlisting the assistance of other comedians and actors such as Dawn French and Robert Lyndsay, Cleese sold the company to its management for pounds 43m in 1989.

Since then the business has been hit by the recession which affected training budgets. However last year the company was still highly profitable and made profits of pounds 3m on sales of pounds 12m.

Mr Cleese no longer owns a stake in the company but has a two-year contract to produce training videos. Commenting on the sale, Video Arts managing director John Christmas said: "We think it is a marvellous opportunity to raise funds to invest in new formats and CD-Rom in particular."

MediaKey plans to raise around pounds 20m from the float which will value the group at pounds 30m. It intends to develop a portfolio of publishing businesses that can be distributed on CD-Rom and other new media.

In a second deal, also announced yesterday, MediaKey is also paying pounds 6m for Marshall Information, a publishing company which specialises in reference books.

Richard Harman, former managing director of publishing group Dorling Kindersley, now runs MediaKey.

He said that the deals would enable MediaKey to enhance the back catalogues of both Video Arts and Marshall and begin to produce the library of titles on CD-Rom.