Oct. 9 (Bloomberg) -- Internet entrepreneur Jay Penske agreed to buy Variety magazine from Reed Elsevier Plc to add the entertainment trade publication to his stable of websites such as Deadline Hollywood and Movieline.
Reed Elsevier is selling the 107 year-old magazine to Penske Media Corporation as it’s focussing on electronic data services and research offerings, the two companies said in a statement today, adding that they won’t disclose the deal’s financial details. The purchase price is about $25 million, said a person familiar with the matter, declining to be identified as the information is not public.
Penske, son of automobile industry executive and race team owner Roger Penske, founded his Los Angeles-based company in 2004 and has been expanding his entertainment news business to tap demand for gossip about celebrities and the movie industry. In 2009, he bought Deadline Hollywood, founded by former Los Angeles Times reporter Nikki Finke, and in 2010, he purchased Boy Genius Report, a technology blog focused on mobile gadgets.
“We plan to rapidly build upon Variety’s foundation, while extending this invaluable brand’s presence across Web, broadcast, mobile, and international markets,” Jay Penske said today.
A Reed Elsevier representative declined to comment on the purchase price.
Reed Elsevier, the London-based publisher of “Gray’s Anatomy” and the LexisNexis database, has been disposing of trade magazines as print media declines and is focusing on online subscriptions, research products and products that compile and analyze electronic data.
Reed Business Information, the unit publishing Variety, had sales of 347 million pounds ($556 million) in the first half of 2012, representing 11 percent of the whole company’s revenue. The sale of magazines and costs helped the division to reach a record operating profit margin of 18 percent in that period.
The company, which acquired Variety in 1987, this year also put its Australian business on the block.
The company ended efforts in 2008 to sell its trade-magazine unit, which once published more than 400 titles, after bids for the business declined amid economic uncertainty. Since then, the company has sold titles piecemeal, including U.S. publications Publishers Weekly, Broadcasting & Cable and Multichannel News.
Chief Executive Officer Erik Engstrom said in July that the business now has fewer than 100 titles.
“We’re now focusing on organic growth and selective acquisitions in online paid content services,” Mark Kelsey, CEO of Reed Business Information, said today in an interview.
Reed Elsevier dropped 0.3 percent to 602 pence today in London as of 4:01 p.m., valuing the local stock at 7.3 billion pounds. Including the company’s listing in Amsterdam, where the shares declined 0.4 percent to 10.44 euros, Reed Elsevier has a total market value of 13.8 billion pounds.
Reed Elsevier said in July that completed and planned disposals will be “mildly dilutive” to earnings per share in the short term. To offset this, proceeds from asset sales will be used to buy back shares this year.
To contact the reporter on this story: Kristen Schweizer in Cannes, France, via firstname.lastname@example.org
To contact the editor responsible for this story: Kenneth Wong at email@example.com