In April of 2015, UBM first announced its intention to sell the press release distributor, PR Newswire. Following this, the British communications firm received several offers from different parties hoping to acquire the business. And this week, the company expects to make a final decision on the sale.
What is PR Newswire?
PR Newswire delivers news and press releases, as well as, marketing messages for several companies. Despite its English roots, the business caters primarily to North American clients. In fact, according to the NY Times, in 2014 PRNewswire got roughly 50% of its revenue from the U.S. market. This market generated revenue of £195.8 million, which is about US $302.6 million.
UBM Reportedly Finalizing Sale
In spite of the profitable venture, however, UBM wants to divest the business to focus more on its core operations. As a result, the company is now on the final leg of selling off PR Newswire Association LLC.
Alleged Competitors of the PR Newswire Buyout
The company did not name the contenders before, but Reuters named Cision and Vista Equity Partners Management LLC as the two primary competitors. These two buyers are actually new to the playing field, and reportedly only submitted offers just last week.
Cision provides PR software and expertise, and belongs to parent company, GTCR LLC. This deal is not the only acquisition GTCR got involved with recently, as the company continues to invest more and more in PR software. Just last year, the company bought Cision, which it then merged with Vocus. The company then acquired media intelligence company, Gorkana Group Ltd, through Cision.
Vista Equity Partners is an American company which also operates in the software and technology field. The firm brings fifteen years of experience to the table and runs offices across the U.S. in California, Texas and Illinois.
UBM Will Only Sell for the Right Price
While UBM shows an eagerness to sell PR Newswire, the company is reasonably reluctant to do so without a compelling offer. According to Reuters, “the leveraged finance markets have been challenging in recent weeks, weighing on the value of the offers and making a deal uncertain…”
Despite these challenges, if UBM sells PR Newswire, it expects to cash in on over $700 million and should make a decision over the next few days. Still, the company remains tentative about selling the company, stating in a news release that, “There is no certainty… these discussions will result in a transaction being agreed.”
UBM hosts headquarters in London, and primarily focuses its efforts on planning events and providing marketing services. Trade shows and planning other events make up roughly 60% of UBM’s businesses. Thus, the distribution of press releases for North American companies represents only a fraction of the business, but a profitable one.
The company recently began to focus more on planning events and trade shows in 2014. It affirmed this by purchasing Advanstar, which is a Californian company specializing in organizing trade shows and providing marketing services. UBM paid $972 million for the company, and hoped to create the largest organizer of trade shows and events in the U.S. with the deal.
In 2014, UBM reported annual revenue of $746.3 million. But, in 2015, the company reported a pre-tax profit decrease of more than 37%. Subsequently, this sale should provide well needed cash as the company continues to expand its operations in North America and the rest of the world.