Telegraaf Media Groep N.V. (TMG) has reached agreement with NPM Capital and the management of Keesing Group BV (Keesing) to acquire 100 per cent of the shares in Keesing at a total price of € 81.3 million. This transaction is subject to approval by the Works Council of TMG. Given Keesing's profitability, the investment - which has retrospective effect to 1 April 2006 - will make a positive contribution to TMG's earnings per share. Approximately 40 per cent of the purchase price is to be drawn from outside capital.
Founded in 1911, Keesing's principal activity is the publication of puzzle magazines for the Dutch, Belgian, Danish and French markets. The business has evolved into a multinational publishing house with branches in four European countries. In all, it produces about 300 printed and digital publications in five languages. Thanks in part to the introduction of so-called "logic puzzles" like sudoku, Keesing is currently experiencing solid growth. Expected turnover in 2006 is € 55 million, with an EBITA rate of approximately 20 per cent. Keesing directly employs about 250 people.
The acquisition of Keesing is fully in line with TMG's strategy, which is to increase its share of media consumption in the home market whilst at the same time expanding its portfolio to include profitable international activities. In the Netherlands, the two organisations serve much the same target audience. TMG sees potential for the Keesing publications in online and mobile applications, as well the possibility of expanding its puzzle-related activities to new markets in which TMG is or will become active.
Keesing current management team, Mr P. Tordoir and Mr D. Reichel, are to take a combined stake of approximately 5 per cent in the firm, and will continue to lead and develop it.
'Buying a publishing house devoted mainly to puzzle magazines may not sound as sexy as an investment in a new internet site or a radio station,' says TMG's CEOAd Swartjes. 'But the ageing population of the Netherlands means that, by acquiring Keesing, we are making further inroads into a promising and growing segment: the elderly. Moreover, the logic puzzles are tapping a younger market. For TMG, this deal also represents a solid boost to the earnings per share. When you add to that the extra opportunities for international expansion and the potential for conversion into further development of our already impressive share of the internet market in the Netherlands, then you can see that buying Keesing dovetails perfectly with our established policy.'
'The partnership with TMG offers us many opportunities to reinforce our position,' adds Peter Tordoir, Chairman of Keesing Group BV. 'We are looking forward to becoming part of TMG's dynamism and to sharing knowledge and expertise with them in the areas of marketing and multimedia. Moreover, we can now accelerate our international plans with the backing of TMG.'