Future Network to sell its U.S. magazine title Business 2.0, its global brand and related conference and online activities to The FORTUNE Group at Time Inc. for an initial consideration of $68.0 million (£48.8 million) in cash, plus additional considerations dependent on financial performance through to the end of 2006;
The FORTUNE Group will combine Business 2.0 with its publication eCompany Now, to create a re-designed magazine (under the name Business 2.0) with a monthly circulation of 550,000;
Net proceeds from the disposal of Business 2.0, after taking into account taxation and transaction expenses, are expected to be approximately $48.4 million (£34.7 million at current exchange rates). On a pro forma basis net proceeds will be $39.4 million (£26.4 million at the exchange rate on 31 December 2000). Net proceeds will be used to fund restructuring costs and repay Group debt;
Due to its size, the disposal of Business 2.0 is conditional upon shareholders’ approval, which will be sought at an Extraordinary General Meeting; and
Future Network has received irrevocable undertakings to vote in favour of the disposal from shareholders, including Director’s beneficial holdings, representing 53.0 per cent. of the Company’s issued share capital.
Chris Anderson, Chairman of Future Network, commented:
Business 2.0 has been a remarkable success story for Future, rapidly attracting a large high-level audience, spectacular advertising growth and numerous awards. We are delighted that the world’s leading magazine publisher has agreed to acquire the brand and take what we’ve built to the next level. The combination of Business 2.0 and eCompany Now will create a magazine of substantial scale and influence.
Jack Haire, President of The FORTUNE Group at Time Inc., commented:
”We have admired the progress made by Business 2.0 since its launch and are delighted to have the opportunity to further build this powerful brand. This transaction demonstrates our commitment to this market sector, and we believe that the formidable combination of Business 2.0 with eCompany Now will be well positioned to flourish.
