Why M&A is on the rise in UK publishing

M&A and financing transactions in the UK publishing sector are on the rise with private equity houses the principle buyers in the sector as they continue to add to their portfolios as revenue continues to be driven by digital growth, rather than traditional publishing. TMT Finance is closely following several current and upcoming transactions.

It’s been a busy first half of the year on the UK publishing scene. The sale of Dennis Publishing is nearing completion after Exponent Private Equity is believed to have snapped up the asset for a reported £150m-£200m. Raymond James is also running the sale process of B2B content business Globe Business Media, which is valued between £70m and £80m.

B2B media co Incisive Media is potentially gearing up for an IPO with private equity owners Alchemy Partners considering listing the business on the AIM, although a dual track is also believed to be on the cards. Incisive is expected to fetch an EBITDA multiple of 13 to 14 times, which is the higher end of typical sales in the sector, which have previously hovered around 12 times EBITDA, as with Bowmark Capital’s sale of Law Business Research for 12 times and Bridgepoint Capital’s acquisition of PEI Media, also for 12 times. The Portico Capital-run sale of UK news and research company Financial Express was expected to fetch between 12-15 times EBITDA in its acquisition by HgCapital earlier this year.

Lyceum Capital is currently testing the market for portfolio asset AgriBriefing, with Raymond James hired to find a buyer for the business, which is expected to fetch £150m. TMT Finance sources have stated that this is part of Lyceum’s more long-term effort to lighten their portfolio, with more assets set to hit the market in the next year.

While private equity buyers appear to be dominating the market, UK publishing houses are not shying away from the action, with UK media firm Future recently announcing an acquisition across the pond, taking over digital publisher Purch in a £105.7m deal.

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