M&A

The Mondadori Group reports today that it has signed an agreement for the acquisition by the subsidiary Rizzoli International Publications Inc. of 100% of the share capital of Chelsea Green Publishing Company. Founded 40 years ago by Ian and Margo Baldwin, the publisher is based in Vermont (USA) and in the UK through its subsidiary Chelsea Green Publishing UK Ltd. Its editorial focus is sustainability – particularly green, health and wellness issues – and promoting cultural diversity.

The Mondadori Group already has a presence in the United States through its subsidiary Rizzoli International Publications Inc., a leading publisher of illustrated English-language books on Lifestyle and Interior Design, which has also owned the historic Rizzoli bookstore in New York for the past 60 years.

With the acquisition of Chelsea Green Publishing, the Mondadori Group is taking a further step on its international development journey in English-speaking markets, which recently began with the establishment of London-based Rizzoli UK.

“The strengthening of the Mondadori Group’s presence in the United States and the United Kingdom through the acquisition of Chelsea Green Publishing, and the launch of Rizzoli’s new UK branch, are further steps on our growth path outside the domestic trade market. I am therefore delighted to welcome Chelsea Green Publishing, with whom we share a vision of quality editorial content focused on issues related to sustainability and lifestyles that respect ecosystems and nature,” commented Mondadori Group CEO Antonio Porro.

Consideration for the transaction, which will be paid fully in cash on the closing date – expected by the end of the first half of 2024 – is set at $5 million (on a debt-and-cash free basis) and will be subject to adjustment according to the NFP on the date of completion of the acquisition. In the last approved financial statements (2022), the company reported consolidated revenues of USD 8.1 million and an operating income of USD 1.1 million.

As part of this acquisition, Margo Baldwin will assume the role of Publisher Emeritus of Chelsea Green Publishing, guaranteeing the publishing quality and continuity of the company with her extensive experience. Stefano Peccatori will assume the role of CEO and President, leading the international development and strategic integration, working with the Rizzoli International Publications Inc. and Chelsea Green Publishing teams.

The Mondadori Group announces that, through Mondadori Libri S.p.A., it has entered a start-up to develop the webnovel market in Europe.

The initiative, which involves an initial investment of € 1.5 million in 2024, and an additional € 1.5 million planned for 2025, stems from an agreement with Bookrepublic, an industrial partner with specific know-how and capable of supporting future operational growth. The company led by Marco Ferrario has been at the forefront of digital publishing in Italy for more than 10 years and has always been attentive to new literary trends.

The deal will come to fruition with the launch by the end of the year of a dedicated proprietary app – to be called Narae. Developed by an in-house team, initially with content in Italian and French, it will gradually expand its reach to encompass other European countries.

Designed to be read on a smartphone screen, webnovels are a form of serialised fiction of a highly innovative nature which, having started with great success in South Korea, has gained growing popularity and a solid fanbase in Japan and China as well. Content takes the form of series – primarily in the romance, fantasy, and crime genres – and is designed to originate and be enjoyed in other formats as well. Webnovels consist of a large number of short episodes, often more than a hundred, and, if successful, they can extend indefinitely.

After a recent launch in the United States and a successful debut in France, webnovels are now ready to conquer Europe, particularly following the global spread of Korean entertainment content in music, film, and comics.

«This investment reaffirms our Group’s willingness to look at what is most innovativein the international publishing environment. As it evolves, the world of webnovels is demonstrating creativity and the ability to feed other media as well, such as cinema, television series, and in many cases even book publishing itself» says Enrico Selva Coddè, CEO of Mondadori Libri.

«Webnovels are a very interesting and avant-garde model of digital publishing: they could be defined as the digital reinterpretation of serialised novels published in newspapers in the 1800s – says Marco Ferrario, CEO of Bookrepublic; and it is not surprising for it now to originate in an Asian country. The content is created specifically to be read on a mobile, borrowing techniques used in the production of video series and providing ways of accessing content that are inspired by gaming. Our challenge will be to find the route into Europe with this model», concludes Ferrario.

Bookrepublic was founded in 2010 by Marco Ferrario together with financial partners Gianluca Andena and Guido Paolo Gamucci (both former Permira partners), Marco Pittini and Guido Carissimo and has always been one of the leading players in the distribution and sale of ebooks and audiobooks in Italy. Over time, Bookrepublic has played a leading role in many digital publishing initiatives, including the organisation of IfBookThen, one of the most successful events in Europe on digital innovation in publishing, and the launch of digital-only brands such as 40K and emma books. In March 2024, the German group Bookwire, European leader in digital distribution, chose Bookrepublic as its Italian partner for its entry into this market.

The Mondadori Group announces that, through its subsidiary Mondadori Libri S.p.A., it has today completed the acquisition of 51% of the share capital of Star Shop Distribuzione S.r.l., a company operating in the comics segment with pubishing and gadgets, particularly as a distributor for third-party publishers in the comic book channel and operator of direct and affiliated retail outlets in the same segment.

As communicated to the market on 29 June 2023, following authorisation by the Italian Antitrust Authority pursuant to Law 287/1990 – as previously announced on 3 November 2023 -, the transaction is effective from today’s date, as of which Mondadori will also proceed with the full consolidation of the company.

As previously stated, the acquisition makes it possible to replicate in the comics segment the vertically-integrated business model with which the Mondadori Group already operates in the book segment.

Under the agreement, Sergio Cavallerin and Matteo Cavallerin – who founded and have thus far successfully managed the company – will retain management responsibility and continue to hold the role of Executive Directors in the Company.

The price, based on an Enterprise Value of 9 million euros, covering 100% of the Company, is 4.6 million euros, entirely paid in cash today, and will be subject to adjustment based on the final net financial position on 1 February 2024.

As previously stated, the agreement includes the signing of put & call option contracts governing the transfer of the residual 49% share of Star Shop Distribuzione. The options will be available for exercise in two equal tranches respectively starting from the approval of the 2025 financial statements and of the 2028 financial statements, at a price to be defined on the basis of the company’s results during the three-year periods 2023-2025 and 2026-2028.

Arnoldo Mondadori Editore S.p.A. has announced today’s signing of the contract of sale of the entire stake in Mediamond S.p.A. – advertising sales company – equal to 50% of the share capital and held by its subsidiary Direct Channel S.p.A., to Publitalia ‘80 S.p.A. The transaction will take effect from 1 January 2024 and will allow Publitalia ‘80 S.p.A., which already holds 50% of Mediamond S.p.A., to increase its stake to 100%.

The transaction price was defined on the basis of the pro-rata value of equity as at 31/12/2023, expected to amount to € 1.4 million and corresponding to the book value of the interest, with consequent neutral accounting effects on the Mondadori Group’s consolidated result.

The sale is consistent with the strategy already announced by the Mondadori Group to focus on the sector of books and a gradual easing off of its presence in business areas that are no longer central and, in particular, sectors heavily associated with advertising revenue.

In the context of the transaction – pursuant to the regulation approved with Consob Resolution no. 17221 of 12/03/2010, as amended – Publitalia ‘80 S.p.A. qualifies as a related party of Arnoldo Mondadori Editore S.p.A. since the former is a company subject to joint control with Arnoldo Mondadori Editore S.p.A.

Nevertheless, the transaction is of lesser importance since it does not exceed the thresholds identified pursuant to article 4, paragraph 1, letter a) of the aforementioned Consob Regulation.

The sale was consequently approved by the Board of Directors of Arnoldo Mondadori Editore S.p.A. following a motivated – non-binding – favourable opinion on the company’s interest in executing the transaction and on the expediency and substantial fairness of the related conditions issued by the Related Party Committee, formed exclusively of independent directors.

The Mondadori Group announces to have received notice from the Antitrust Authority of the authorization – as disclosed last 29 June 2023 – to acquire a 51% stake in Star Shop Distribuzione S.r.l., operating in the distribution of third party publishers in the comics channel and in the management of direct and franchised sales outlets in the same segment.

Following the authorization from the above Authority, the transaction will be fully implemented on the closing date, the definition of which will be the subject of timely disclosure to the market.

The Board of Directors of Arnoldo Mondadori Editore S.p.A. has today examined and defined – in light of a more favourable evolution than had been previously forecast of both the business and the prices of the main production factors – the upwards revision of the FY 2023 targets previously disclosed to the market.

Income Statement:

• single-digit revenue growth confirmed;
• Adjusted EBITDA expected to rise by high single-digit/low double-digit (compared with the previous single-digit forecast), with margins expected to range between 16% and 17% (from the previous 15%);
• approximately 20% growth of the net result, forecast doubled with respect to the previous estimates (+10%), due to both the operational improvement and the effects of the sale of the equity investment held in il Giornale.

Cash Flow and Net Financial Position:

• ordinary cash flow is expected to range between € 65 and 70 million, showing an increase of up to 15% compared with the 2022 figure (previous estimate: € 60-65 million, +10%);
• the Group’s net financial debt (IFRS 16) is confirmed to come in, at end FY 2023, as 1.0x adjusted EBITDA, down from 1.3x at end 2022.

The Mondadori Group also reports that today the parent company Arnoldo Mondadori Editore S.p.A. signed the contract for the acquisition of an equity investment equal to 51% of the share capital of Star Shop Distribuzione S.r.l. operating in the distribution of third party publishers in the comics channel and in the management of direct and franchised sales outlets in the same segment.

The acquisition would make it possible to replicate the vertically-integrated business model with which the Mondadori Group already operates in the book segment, in the comics segment too.

The acquisition of 51% of the share capital of Star Shop Distribuzione has been defined on the basis of an enterprise value, on a cash free/debt free basis (in relation to 100% of the Company), of € 9 million.
The price, which will be paid in full, in cash, at closing, will be adjusted on the basis of the net financial position and net working capital at the date on which the acquisition is completed.

The execution of the transaction is subject to the issue by the Antitrust Authority, in accordance with Law 287/1990, of a ruling not to start an investigation or to authorise the transaction, which entails no charges or requirements or corrective measures considered relevant for the Mondadori Group or Star Shop Distribuzione.

The agreements defined also envisage the signing of put & call option contracts governing the transfer of the residual 49% share of Star Shop Distribuzione. The options will be available for exercise in two equal tranches respectively starting from the approval of the 2025 financial statements and of the 2028 financial statements, at a price to be defined on the basis of the company’s results during the three-year periods 2023-2025 and 2026-2028.

In FY 2022, Star Shop Distribuzione recorded revenues of € 34.2 million, EBITDA of € 2 million and net profit of € 1.2 million.

The transaction sees Sergio Cavallerin and Matteo Cavallerin – who founded and to date have successfully managed the company – retain management responsibility and continue to hold the role of Executive Directors in the Company.

Arnoldo Mondadori Editore S.p.A. announces to have finalized today the closing of the disposal of its 18.45% equity stake in Società Europea di Edizioni S.p.A. to P.B.F. S.r.l., previously announced on 16 March last.

The sale consideration, to be settled entirely in cash, was set at 2.3 million euro, taking account of the price adjustment mechanism based on the company’s net financial position at the closing date.

The sale has generated a net capital gain of 0.5 million euro in the Mondadori Group income statement.
In financial year 2022, this stakeholding generated a loss of 1.8 million euro in the consolidated financial statements.

The sale is consistent with the Group strategy to focus on the books business and divest non-core assets.

The Mondadori Group announces the conclusion today, through its subsidiary Mondadori Libri S.p.A., of the acquisition of a further 25% stake in A.L.I. S.r.l. – Agenzia Libraria International, operating in the distribution of books.

The transaction – which raises the Mondadori Group stake in A.L.I. to 75%, which will be subject to full consolidation as of 1 January 2023 – takes place in execution of the agreements defined and disclosed last 11 May 2022 upon acquisition of an initial 50% stake, effective earlier than the date originally scheduled for 28 February 2023.

The provisional price, paid entirely in cash, is approximately € 9.5 million and was determined, as already disclosed to the market, on the basis of an average 2021-2022 EBITDA and the positive net financial position (cash) of the scope covered by the transaction, which at 31 December 2022 amounted to € 17.8 million (preliminary figure).

Additionally, the defined agreements give the Mondadori Group the right to acquire the remaining 25% in A.L.I., at a price to be determined on the basis of an average 2023-2024 EBITDA, through put&call options exercisable by 30 July 2025.

The transaction is consistent with the path of vertical integration in the books market, with a view to the gradual strengthening in the promotion and distribution activities of third-party publishers.

The Mondadori Group announces the execution today by the subsidiary Mondadori Media S.p.A. of the contract for the disposal to Reworld Media S.A. – signed last 22 November and disclosed to the market on the same date – of the print and digital publishing operations of the Grazia and Icon brands, as well as the related international licensing network.

 The execution of the transaction took place with the transfer of the business unit heading the operations disposed of to a newly-incorporated company and the concurrent disposal to Reworld Media of 100% of the share capital of the transferee.

The Mondadori Group announces that it has received notification today from the Offices of the Presidency of the Council of Ministers of the resolution not to exercise the special powers under Law Decree 21/2012 regarding the disposal to Reworld Media S.A. of the operations under the Grazia and Icon brands, as disclosed last 22 November.

The measure, which in essence authorizes the disposal of the above operations, triggers the fulfilment of the suspensive condition attached to the sale agreement, which will therefore be fully executed on the closing date.

The completion of the transaction will be promptly disclosed to the market.