Bauer sold to Webstar NZ owner Mercury
The region's biggest magazine publisher, Bauer Media, is in new hands, with private equity fund Mercury Capital buying what was Kerry Packer's ACP from its German owners.
Sydney-based Mercury Capital is the majority owner of heatset printer Webstar in New Zealand. Webstar suffered a massive hole in its production schedule when Bauer abruptly stopped publishing there two months ago, at the height of the Covid crisis.
The price has not been disclosed but Print21 understands Bauer has taken a 90 per cent hit on the $525m it paid ACP in 2012 for the business, with Mercury, which has been on the trail of Bauer for the past six months, thought to be paying less than $50m for the current business.
Bauer, which bought rival Pacific two weeks ago for $40m and $6m worth of advertising, has around 55 per cent of the Australian magazine market, and is – or was – the biggest publisher by far in New Zealand.
Bauer magazines in Australia are printed by both Ovato, which has the original Bauer contract, and rival IVE, which has the Pacific Magazines contract.
Senior execs at both Australian printers – the two biggest in the country and the only two with heatset capacity – will now be jockeying for position, with nerves jangling.
Industry insiders say one the one hand it is unlikely that the new owners will concentrate print production with one or the other, as having two printers gives guarantee of supply and price competition. However, others say that having just one printer will be simpler, and any short-term redundancy can be taken up by Webstar NZ.
A loss of the contract for either of the heatset printers would be significant, but magazines are far from their only product.
The move has to be seen as good for the industry though, with print-believing Mercury the new owner of the magazine publisher.
Last month in New Zealand, Ovato launched a new division Ovato Publishing Solutions to help the smaller publishers it anticipated would buy the former Bauer titles, with a one-stop shop of services. The Mercury deal will mean that any magazines that it resurrects in NZ will be printed at Webstar, although some of the titles may still be sold off. It will face obstacles relaunching magazines there, as some senior staff now have new jobs.
Bauer's time in Australia and New Zealand can only be described as tumultuous; it has been through six CEOs in eight years, sacked hundreds of staff, and closed major titles including Dolly, Cleo, Cosmopiltan and Zoo. The Covid crisis saw advertising, which has been in continuous decline, fall off a cliff. It bought its biggest rival Pacific, but only under duress.
The binding offer from Mercury Capital involves all of Bauer Media Australia’s titles from across the Women’s Entertainment & Lifestyle; Fashion, Beauty & Health; Homes; Food; Motoring & Trader lifestyle categories. The agreement also includes those titles recently acquired by Bauer from Pacific Magazines, as well as Bauer’s New Zealand mastheads.
Veit Dengler, Bauer Media Group COO, said: “We have been proud to be the custodian of these iconic titles in Australia. I am confident that under Mercury’s ownership they will continue to thrive.”
Brendon Hill, Bauer Media ANZ CEO, said: “This signals an exciting new chapter for the business. With new ownership and our bolstered portfolio, we have unparalleled opportunities to connect with more Australians than ever before and continue our strategy of digital growth and innovation.
“We have increased flexibility to diversify revenue streams and grow and innovate across our multi-platform offerings. Additionally, we are well placed to invest in the key drivers of future success – high-quality content and digital development which is good for us, our audiences, clients and the Australian industry as a whole.”
Bauer’s expanded portfolio of 43 brands now reaches six in 10 Australian women each month, which is more than 6.5 million women each month across magazines, websites, video, social, customer review sites, podcasts and experiences. The company's portfolio has a print readership of 6.8 million per year and more than 30.5 million social connections.
“Despite the challenges presented by Covid-19, we have seen significant growth in subscriptions and digital audiences across our food, home, youth and fashion brands, demonstrating that Australians still love and read our brands. We have seen great vision, success, and growth under Bauer Media Group ownership and now look forward to working alongside Mercury Capital to build on this growth under a new brand in the future,” Hill said.
The sale is subject to regulatory approval with the transaction expected to be complete in mid-July and the new brand to be announced in the coming months.