Wednesday, May 5, 2010

Reed Business Information looks to off load titles to former publishers before considering third party sales

The trade pub Folio: has confirmed what I wrote last week, that RBI is looking to swing deals with the former publishers of their publications.

Folio: quotes RBI CFO John Poulin as stating in an e-mail that the company will close some deals this week and if there are any properties left third party bids will be considered after May 10th.

By closing the properties, then selling off assets, Reed is probably getting some tax benefits. Deals such as these usually involve little cash but also include profit sharing deals going forward. Often they include production and facility sharing elements, as well, though it may be unlikely here.

I expect the construction group to go this week but complicating any deal may be that the group was consolidated into one group from two recently: housing and commercial construction combined under one manager. This involved the demotion of some publishers, as well as the elimination of important positions. Any new owner will have to rebuild the resources and sales power of the brands in order to succeed -- not to mention create new interactive teams where none existed in the past.