Reed Elsevier Sells Australian Unit to Catalyst Investment

Reed Elsevier Plc sold its Australian media business to private-equity firm Catalyst Investment Managers Pty as the owner of the LexisNexis database seeks to reduce its dependence on advertising revenue.

The Australian unit owns titles including Money Management, Australian Doctor and Pharmacy News, and online directories such as, London-based Reed Elsevier said in a statement. The business has annual revenue of about A$60 million ($63.5 million), said a person with knowledge of the matter who asked not to be identified because the financial details aren’t publicly disclosed.

Reed Elsevier has been disposing of print titles within its Reed Business Information division to focus on electronic data services and research offerings. It sold entertainment trade magazine Variety to Internet entrepreneur Jay Penske in October.

Reed Business Information had sales of 347 million pounds ($560 million) in the first half of 2012, accounting for 11 percent of the company’s revenue. The sale of magazines and a reduction in costs helped the division reach a record operating profit margin of 18 percent in that period.

Reed Elsevier rose as much as 1.3 percent in London and traded 1 percent higher at 655.5 pence as of 9:07 a.m., valuing the local stock at 7.9 billion pounds ($12.8 billion). Including the company’s listing in Amsterdam, where the shares rose 0.4 percent, Reed Elsevier has a total market value of about 15 billion pounds.

Failed Sale

Catalyst, which has completed management buyouts of companies valued at a combined A$3 billion, will create a new entity owned by its funds to acquire Reed’s Australian business, Reed said.

Reed Elsevier called off an attempt to sell Reed Business Information in 2008 amid an economic slowdown. Since then, the company has sold titles piecemeal, including U.S. publications Publishers Weekly, Broadcasting & Cable and Multichannel News.

Reed has divested 150 titles since 2008, with revenue from print advertising in the unit falling from 350 million pounds to less than 100 million pounds in the period. Total revenue at Reed Business Information was 695 million pounds in 2011.

The company said in July that completed and planned disposals will be “mildly dilutive” to earnings per share in the short term. It said on Dec. 28 it would buy back shares worth as much as 100 million pounds through February 2013.

The stock climbed 1.3 percent to 649 pence at the close of trading in London yesterday. They gained 24 percent in 2012.

Reed said it was advised by Investec on the transaction.

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