Reed Elsevier embraces digital future

Science, technical and medical publisher Reed Elsevier has signalled its intention to sell its business titles and concentrate on information-driven services and products.

Among the titles published by the company’s business-to-business arm, Reed Business Information (RBI), are New Scientist, Computer Weekly and Variety.

The Anglo-Dutch media giant announced the move last month after its 2007 financial results, saying the division no longer fitted with the future direction of the company because of its reliance on advertising.

At the same time as Reed Elsevier was signalling its intention to focus on growing its business through subscription-based services, it announced the acquisition of ChoicePoint for £2.1bn payable in cash.
ChoicePoint provides data and analytics to the insurance sector. Combined with Reed’s LexisNexis risk information and analytics group, it will create a $1.5bn revenue risk management business in a fast-growing sector.

Reed Elsevier also announced the completion of the sale of Harcourt Education.
The planned sale of RBI marks a milestone in the transformation of Reed Elsevier from a print publisher to an online provider. The company said it would focus increasingly on subscription-based services and events rather than advertising-funded products. Around 60% of RBI’s revenue comes from advertising.

Sir Crispin Davis, Reed Elsevier’s chief executive, said there was no sign of a downturn at RBI, insisting that it was a “well-managed high-quality business” whose future outlook was “positive”.

Davis said the business was not yet in talks with potential buyers, adding that current market conditions made it likely that the sale would take some time.

Sir Crispin told Reuters: “We don’t have any particular buyer in mind. We do think there will be a wide and strong level of interest in this business both from strategic and private equity buyers. We are very open-minded on who and when.”

Analysts believe the business could fetch up to £2.5bn.

Reed Elsevier said RBI could be sold as a whole or in parts. Potential bidders could include rival publishers and specialists interested in single titles.

Sir Crispin also revealed that job cuts were likely over the next three years, but said it was too early to say how many. Newspaper reports put the figure at around 1,000.

Keith Jones, RBI’s chief executive, said it would be “business as usual” for the division. He said the sale heralded “an exciting new era”.

The announcement follows a period of cost-cutting at Surrey-based RBI, which has included staff who leave not being replaced.

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