Women’s magazines business up for sale

Private equity firm Mercury Capital has confirmed it has called in investment bankers to find a buyer for Are Media.

The Sydney firm has given KPMG Corporate Finance the task of running a sales process.

Are Media holds some of Australia’s best known magazine brands including The Australian Women’s Weekly, Woman’s Day and Better Homes and Gardens.

Are Media was acquired by Mercury for an undisclosed sum, likely to have been little more than $50 million, in 2020.

The vendor was Bauer Media, the Australian offshoot of the Hamburg, Germany, publishing business. In 2012, Bauer spent $565 million to acquire ACP Magazines from Nine Entertainment. Bauer spent a further $40 million in early 2020 to add Pacific Magazines acquired from Seven West Media. That acquisition brought the two leading Australian women’s magazines into the same stable for the first time and was completed only weeks before the entire business was sold to Mercury.

Mercury chief executive Clark Perkins said the move to put the business up for sale in the firm’s sixth year of ownership followed “a couple of private approaches from interested parties”.

The Australian Women’s Weekly was created by Frank Packer in 1933 and under his son Kerry Packer became one of the world’s largest circulation magazines. According to Are Media, it currently has 1.2 million print readers. Better Homes and Gardens was the precursor of a long-running Seven Network television show. Are Media says Better Homes and Gardens now has 1.7 million print readers.

Throughout Bauer’s involvement in the Australian industry, demand for advertising in print magazines was falling against digital competition. The major magazine brand names, however, were still widely recognised and appeared to have value around which to build digital businesses. How successful Are Media has been in doing that, while retaining print circulation revenue, will be key to a successful sale.

Are Media’s most recent financial figures, lodged last year for the 12 months to the end of 2022, show revenue of $337 million. More than $266 million of that was from circulation, that is print sales, while $48 million came from advertising. The company recorded a $10 million after-tax loss for the year.

Mercury invested in Are Media from its $600 million Fund 3 closed in late 2018.

Image: Women’s Weekly remains a highly recognised brand.