Seven West Media has announced it has signed a binding agreement to sell Pacific Magazines to Bauer Media for a cash consideration of $40 million.
The sale is expected to complete by the end of the calendar year, subject to ACCC approval.
There has been growing speculation of the sale over the last couple of weeks.
Pacific Magazines currently publish titles such as Better Home And Gardens, marie claire, Who, New Idea and Men’s and Women’s Health.
According to Seven’s annual report, Pac Magazines generated revenue of just shy of $130 million for the financial year, down 7.2 per cent from $139.5 million the previous year.
The proceeds of the sale will be used to pay down debt, improving SWM’s balance sheet flexibility and simplifying the organisation to focus on its content led growth strategy.
SWM and Bauer Media have also entered into commercial arrangements to mutually benefit both parties, including advertising spend commitments, the ongoing production of Better Homes and Gardens television programme, and sharing lifestyle content under a long-term agreement.
In addition, SWM will receive $6.6 million of advertising on Bauer Media assets over three years.
Seven CEO James Warburton said: “The sale of Pacific Magazines is another major initiative aligned with our strategy to improve balance sheet flexibility and simplify the operating model to enable greater focus on growth initiatives.
“The team at Pacific have been at the forefront of our groups transformation and have done a tremendous job at repositioning their business, but there can be no doubt that there is a greater future within a larger scaled magazine group.”
Bauer Media Australia CEO Brendon Hill added: “We are delighted to be able to combine our talent and resources with one of our most admired and respected industry peers. More than ever, scale and superior content is emerging as the differentiator of success in publishing.
“This transaction will bring the Bauer and Pacific teams greater opportunities to innovate, create and collaborate – and continue to delight their audiences.”
Just last Friday, Seven announced it will merge with Prime Media group through a 100 per cent scrip-based Prime scheme of arrangement and sell its Western Australian radio assets (Redwave) to Southern Cross Media for $28 million.
SWM and Prime have entered into a Scheme Implementation Deed under which it is proposed that SWM will acquire all Prime’s issued shares through a Scheme of Arrangement under which Prime shareholders will receive 0.4582 SWM shares for each Prime share that they hold.
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