Dow Jones is acquiring the 50 percent of the information service Factiva it does not already own from Reuters for $160 million (most in cash) and several annual payments, ending the joint venture that dates back to 1999.
In a statment, DJ CEO Rich Zannino said the acquisition nearly doubles the size of DJ’s Enterprise Media Group: “Together with the previously announced sale of up to six of our community newspapers, this reflects our determination to reduce our reliance on print publishing and to deploy our capital to the highest-returning investments for our shareholders as opportunities arise.” The deal should shift DJ’s print reliance from 70 percent of revenue in 2006 to about 60 percent in 2007. Release.
-- The DJ Enterprise Media Group is led by Claire Hart, who was appointed president after six years as CEO of Factiva.
Purchase price: The financial arrangements include a $160 million payment at closing, about $153 million of that in cash. Additionally, DJ will make annual payments over the next 3.5 years totalling about $25 million. The cash portion will be funded by the sale of up to six Ottaway properties, a move that DJ already had made public.
Factiva financials: Factiva estimated revenue for 2006 is about $290 million. Factive has 1.6 million paying subscribers, some 750 employees and 33 locations. It already shares office space with DJ in New Jersey.
The detailed press release includes some color on what DJ sees as the advantages including the removal of JV conditions “that limit Factiva’s business opportunities in its core enterprise market. Removing these restrictions will allow Factiva to develop applications with Dow Jones Newswires and Dow Jones Licensing Services that better target the financial-services market.” Dow Jones Newswires and Licensing Services will be able to offer a full suite of “end-to-end information solutions.” And the Consumer Media Group will be able to use Factiva’s sophisticated enterprise search capabilities to create consumer products.
-- Reuters has also agreed to not compete with Factiva’s core business for two years and will continue supply its content and other commercial arrangements.
-- The deal is subject to regulatory approval and is expected to close by the end of 2006.
Rafat adds: It is called competition...hard to fight the politics of that. Also, I wrote back in 2004, that "this relationship might get strained going ahead, not because of the two companies, but divisions within the two companies: on the Dow Jones side, from WSJ.com and on Reuters’ side, Reuters.com, down the line...”
Related:
-- Dow Jones Re-org: Hart Moves To DJ From Factiva; Will Head Enterprise Media; Wilcox To Lead Community Media
-- Factiva Completes Five Years