Breaking Up RBI for Sale ‘Great Idea’
M&A Sources say downturned economy a factor.
It’s been two months since London-based Reed Elsevier
announced its plans to divest it’s b-to-b arm, Reed Business Information, and
rumors are understandably still swirling about who its potential suitors are,
and when it may actually sell.
The most recent rumor is that Reed may sell the U.S. division
of RBI separate from the European group. According to a
PaidContent report, the U.S.
division—which publishes titles like Variety and Publishers Weekly—could sell
for as much as $500 million.
RBI publishes a number of trade magazines including Variety and Publishers Weekly.
In an e-mail to FOLIO:, Reed declined to comment. But, a
number of industry observers say a separate sale of RBI’s U.S.
division—especially in the downturned state of the economy—would be a smart
"I think it makes sense," says DeSilva + Phillips managing
partner Reed Phillips. We’ve heard that some buyers in the U.S. only want the U.S.
and some in the U.K.
only want the European parts. It’s a smart idea. It should help the sale
"It was unlikely that RBI would be sold in one deal," one
industry observer, who wished to remain anonymous, tells FOLIO:. Early
estimates put the sale of RBI at about $2 billion. "I believe that there
will be multiple deals by geographic region with Variety being sold separately
since it is a trophy asset."
With the economy as it is, it could make sense for Reed to
sell RBI off in pieces. "There are high quality print, online and trade show
businesses within Reed, and many middle market publishers would pay higher
multiples if they could acquire a group that specifically meets their needs,"
says Michael Alcamo, president of New York-based investment bank M.C. Alcamo
So far, private equity groups such as Permira, Providence
Equity Partners and Cinven have been floated as possible suitors, with interest
said to be cooling from other groups like Apax Partners. Industry observers
have said, however, that there is no
doubt that RBI’s buyer will come from private equity.