It seems like a lot longer though given all that has gone on since then. The first challenge was to get the ACCC to clear the deal which eventually happened after the regulator initially raised concerns about the loss of competition in the sector with Bauer Media emerging as Australia’s only publisher of major weekly and monthly titles.
An even bigger potential deal-breaker was the arrival of COVID-19 which has seen the bottom drop out of the advertising market that has upended business models and hammered media values.
It is believed Bauer Media wanted out of the original Pacific deal unless the sale price was reviewed. However thanks to a contract that locked them in the sale has closed today, with the Pacific staff Bauer Media is taking on starting work for Bauer, albeit from home under lockdown, and not the infamous Park Street magazine high rise.
The proceeds of the sale will be used to pay down debt, improving SWM’s balance sheet flexibility and simplifying the organisation to focus on what it has called its content led growth strategy.
SWM and Bauer Media were also planning to enter into commercial arrangements to mutually benefit both parties, including advertising spend commitments, the ongoing production of Better Homes and Gardens television program, and sharing lifestyle content under a long-term agreement. In addition, SWM was to receive $6.6 million of advertising on Bauer Media assets over three years.
At the time of the announcement of the sale, Seven West Media CEO James Warburton said, “The sale of Pacific Magazines is another major initiative aligned with our strategy to improve balance sheet flexibility and simplify the operating model to enable greater focus on growth initiatives. The team at Pacific have been at the forefront of our groups transformation and have done a tremendous job at repositioning their business, but there can be no doubt that there is a greater future within a larger scaled magazine group.”
The Pacific brands that will now have a new home include New Idea, That’s Life! and Home Beautiful. Brands that Bauer will have the Australian rights to under licence include marie claire, Better Homes and Gardens, InStyle, Women’s and Men’s Health and Who.
Even has confirmed $40 million in cash consideration, pre-adjustments and leave provisions, as well as $6.6 million in advertising over three years in Bauer publications, was received by SWM from Bauer for the sale early this morning.
Commenting on the completion of the sale today, Warburton said: “We welcome today’s completion of the sale of Pacific Magazines to Bauer Media. The completion of this transaction is a key step as we work to transform SWM.
“I want to thank all the staff at Pacific for their passion, commitment and tireless work over the years at SWM.”
Brendon Hill, Australia CEO, said: “We are extremely pleased to complete the purchase of Pacific Magazines. It will drive the consolidation publishing needs right now to be competitive at what is a very challenging time for our industry. We welcome the Pacific staff to the Bauer Group and look forward to working with them.
“The economic impact of COVID-19 is affecting the entire media industry but by combining Pacific Magazines with Bauer Media Australia, it will create a stronger business with the capabilities to better compete in a digital world.“The Pacific brands have unique audiences and our combined digital reach will be compelling. We look forward to emerging from the other side of COVID-19 to drive innovation and maximise reach and engagement with our audiences,” said Hill.