You want to sell your publishing house? Then it is good to know what the acquisition market in the field of publishing looks like. The economic crisis and the trend of digitalization have had a positive impact on the number of publishing mergers and acquisitions. And this increase may continue significantly in the coming years.
In light of the challenging environment of recent years - the crisis and digitalization - consolidation has taken place in several segments, according to ABN Amro.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In media, advertising and communications, the industry to which publishing companies belong, an indicative range of EBITDA multiple of 3.3 to 4.0 is currently in place, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
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Want to buy a business or sell a business in the Media, Advertising & Communications sector? With this Brookz Sector Monitor, we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in Media, Advertising & Communications. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
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There is a declining trend in subscriptions/upstandings and advertising revenues of newspapers and magazines. This is causing structurally declining revenues for publishers. In the long term, Rabobank expects the total publishing industry to shrink by 1 to 3 percent, given the still declining subscription and advertising revenues. A positive exception is the book market, where a slight increase is expected.
In figures, the number of publishing houses in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes over the next few years, but also offer the publishing industry many growth and acquisition opportunities:
Media consumption has shifted from print to digital in recent years. This affects publishers of various types of media, such as newspapers and magazines. Digital subscriptions rose sharply in recent years, reaching the million mark last year. Publishers are developing models to make money from that growing digital reach, both through new forms of advertising and paid online content. That change takes time.
Online advertising has grown substantially and has even been the largest advertising medium since 2014. Google and Facebook have a share of around 60 percent in this. The measurability and reach they offer attracts ad budgets like a magnet. For publishers, this means stiff competition. For these parties, it is important to sharpen the strategy in terms of content, mobile, customer loyalty, verticals, transparency and integrated services.
Online, the willingness to pay is lower. Consumers have become accustomed to free platforms with an advertising model. New and existing players are looking for ways to get media consumers to pay for content. There are also new initiatives such as Blendle, where consumers can read a single article for a fee and do not have to buy a whole newspaper. The shortage of demand while supply remains the same results in increasing competition in the industry.
In light of the challenging environment in recent years (the crisis and digitalization), there has been a consolidation drive in multiple segments. As of 2010, as many as 305 mergers and acquisitions of publishers of books, magazines or newspapers took place. At the same time, many new publishing companies are also being established, increasing the number of publishers active in the market.
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