Ovato and IVE face new future as Bauer buys Pacific
The country’s two biggest printers Ovato and IVE are facing a future where the country’s two biggest publishers are just one, as Bauer is spending $40m to buy Pacific Magazines.
At present Ovato prints for Bauer, while IVE prints for Pacific Magazines. Ovato also distributes for both.
Neither Ovato nor IVE is solely dependent on magazine printing, but if either lost the contract to the other it would be a blow for their heatset operations.
Bauer has a 33 per cent market share in the magazine sector, while Pacific has around 22 per cent.
However, industry insiders believe if the deal does go through Bauer is likely to keep both printers as suppliers, in order to maintain competitive pricing, and not risk having all its supply eggs in one basket.
Between them the big two printers have virtually all the country’s heatset capacity, and the same applies in New Zealand.
Speaking to Print21 Geoff Selig, executive chairman of IVE said, “The deal makes sense. We have a good relationship with both companies, and we are a good strategic fit for the new business.”
Kevin Slaven, CEO of PMP, told Print21, “It is a positive move. It shows Bauer’s commitment to magazines, it is good for the industry. We have shown our commitment to both publishers over the years.”
The proposed deal will see Bauer pay $40m to buy Pacific from owner Seven West Media, and give Seven West $6.6m worth of advertising over the first three years. It is now before the ACCC, with the publishers looking for a go-ahead around the turn of the year.
The deal would give Bauer a dominance over magazines in Australia with a 55 per cent market share, and with market leadership in most of the categories, combining more than 50 titles under one roof including The Australian Women's Weekly, Gourmet Traveller, New Idea and Better Homes & Gardens.
Bauer publishes the biggest paid-for magazine, The Australian Women’s Weekly, and the number three title Woman’s Day. Pacific publishes number two Better Homes & Gardens, and numbers four and five New Idea, and That’s Life. The country’s biggest magazine print run is actually for the Coles content marketing magazine, published by Melbourne outfit Medium Rare, with rival Fresh from Woolworth’s the number two, both given away at the checkout.
Bauer was Kerry Packer’s ACP, sold to the German-based business by his son James five years ago as he sought to focus his attention and funds on his casino business. Pacific Magazines was part of PMP before it was spun off as a separate business by Rupert Murdoch as he attempted to pay down debt in the 1990s.