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PR Newswire Association, the US-based information distribution company, is interested in making acquisitions in South America and Asia, CEO Charles Gregson said. Companies in Chile, China and India said they would be receptive to offers.
PR Newswire, a subsidiary of listed UK-based United Business Media (UBM), hopes to expand in southern South America and India, China, South Korea and Australia in Asia, Gregson said. Brazil is the company’s primary focus in South America, along with Argentina and Chile. The target size for acquisitions is around the value of PR Newswire’s past acquisitions, USD 6m to 35m, Gregson added.
According to Gregson, possible targets are news monitoring and distribution services that can add value to its already well-established US operations. Financial advisors have talked with PR Newswire, but the company is still receptive to approaches, Gregson said. UBM has an 8% post-tax cost of capital criterion for all deals, according to Gregson. He said, however, there can be exceptions to the rule.
One potential target is Chilean media aggregator LitoralPress, which has operations in Chile and Argentina. Angela Ortiz, the company’s commercial manager, said that LitoralPress had had initial contacts with PR Newswire for a visit a number of years ago, but that the visit never happened.
She added that LitoralPress would be open to any approaches from PR Newswire. ”Of course we could study any sort of association or offer,” she said. LitoralPress has some 110 employees and a subsidiary in Argentina called Management.
The company specializes in press clippings and supervising marketing campaigns, a profile similar to Notilog, a Mexican company recently acquired by PR Newswire. Ortiz did not disclose financial information. She did say that LitoralPress is by far the main player in the Chilean market, and an important player in Argentina.
A potential target in Asia is Meihua Information, a Chinese media monitoring company, according to a person familiar with the Chinese media market. She described Meihua as one of the best in the sector.
Founder Phil Ren said his company, Meihua, is open to talks regarding the sale of a stake in the company. Ren declined to reveal Meihua Information’s revenue, but he said the company was once approached by potential bidders and the expected value of the failed deal was around USD 6m.
Ren cited Tixa Internet Technology as another potential target. Ren said the Beijing-headquartered company is a good fit for PR Newswire because it provides similar services, including news monitoring and distribution. However, Ren pointed out that a Japanese investor has invested in Tixa. ”The exit multiples of Tixa now could be quite high,” Ren said.
On the Subcontinent, India-based agency AdFactors PR would be open to talks with PR Newswire about selling its print monitoring unit, Radar, a source said. ”If someone comes with a proper proposition, we could look at it,” the source added. The source declined to disclose Radar’s revenues, but AdFactors is considered one of the largest agencies in India.
A sector analyst also suggested that electronic-monitoring-service Esha News Monitoring Services Pvt Ltd may be an attractive target. Esha News, headquartered in Mumbai, declined comment.
PR Newswire’s decision to expand internationally comes in response to slow growth in the US market for news distribution, according to Gregson. The chief executive explained that the market for PR Newswire’s core US business of distributing press releases and regulatory filings for publicly-traded companies is growing at around 4% a year. The company, he said, needs to find other areas for growth and expansion. It has identified as growth opportunities foreign markets and niche markets in the US that complement its existing business, he said.
PR Newswire announced 22 August the hiring of David Breitling to serve as executive vice-president of global strategy and business development. Gregson said Breitling will evaluate possible targets and growth opportunities. He previously worked for Paribas, JP Morgan, McKinsey and The World Bank.
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